Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

CORNWALL COUNTY COUNCIL BILL [Lords] (By Order)

HAMPSHIRE BILL [Lords] (By Order)

NOTTINGHAMSHIRE COUNTY COUNCIL [Lords] (By Order)

SHREWSBURY AND ATCHAM BOROUGH COUNCIL BILL [Lords] (By Order)

Orders for Second Reading read.

To be read a Second time upon Thursday 3 February.

Oral Answers to Questions — NATIONAL FINANCE

Falklands Campaign (Costs)

Mr. Dalyell: asked the Chancellor of the Exchequer what has been the total so far of advances from the Contingencies Fund in respect of expenditure by Departments related to the Falklands war and subsequent costs.

The Chief Secretary to the Treasury (Mr. Leon Brittan): As I told the hon. Member on 23 December, £12 million. The amounts charged to the Contingency Reserve are also set out in my answer of 23 December to the hon. Gentleman.

Mr. Dalyell: That is £12 million compared with the £15 million that would be needed to solve the water workers' claim. How does it compare with the £37 million which is the total expenditure of the British Council and the £38 million which is our total aid to India? How does the expenditure on the Falklands compare with the £500 million that is needed urgently for rail investment? Should we not get these matters into prospective?

Mr. Brittan: The hon. Gentleman knows that the figures to which he has referred for other items of expenditure have nothing to do with his question, which is a limited one about advances from the Contingencies Fund. As he knows, that is a special form of financing, which is required to provide money in advance of parliamentary approval for a portion of the expenditure on the Falkland Islands.

Mr. Stokes: What is the total amount of public expenditure that has been incurred in answering all the

questions that have been asked by the hon. Member for West Lothian (Mr. Dalyell) for weeks and weeks on this subject?

Mr. Brittan: I fear that that is a level of expenditure which is so complex in its composition as to require a certain amount of research to discover.

Employment Creation

Mr. Knox: asked the Chancellor of the Exchequer whether he considers that his 1982 Budget has achieved the encouragement to employment which he anticipated.

The Chancellor of the Exchequer (Sir Geoffrey Howe): The Government's consistent policy, maintained in my last Budget, is to reduce inflation and so create the conditions for sustainable recovery, and hence better employment opportunities. The prospect now is for further modest recovery. The outlook for employment can be further improved by continued reduction of costs and further moderation in pay settlements.

Mr. Knox: When does my right hon. and learned Friend expect unemployment to start falling—this year, next year or 1985?

Sir Geoffrey Howe: Even in answer to my hon. Friend I do not intend to break the practice of successive Governments of not forecasting trends of unemployment. By laying the foundations, to which I have referred, for continued success against inflation we are likely to make the speediest progress.

Dr. Bray: Has the Chancellor read the recommendations of the Confederation of British Industry for his Budget? Will he now take the measures that are needed to contain the inflationary effects of the fall in the pound, so that industry can take advantage of the recovery in competitiveness without the costs being passed to the consumer?

Sir Geoffrey Howe: I have, of course, studied the CBI's recommendations and agree with the implications of the hon. Gentleman's question. The fall in the pound will help to improve competitiveness only if it is combined with still lower pay settlements and still greater improvement in productivity.

Mr. Budgen: Does my right hon. and learned Friend agree that the fall in the value of oil represents a very important stimulus to British manufacturing industry, particularly in the west midlands? Will he undertake that the Government will make no attempt whatever to hold up the price of oil?

Sir Geoffrey Howe: My hon. Friend knows that this country is a price taker and not a price maker in the oil markets. It is right that although the modest fall in the price of oil represents both gains and losses for this country, the overall effect is likely to be beneficial. It would, however, be in no one's interest if the price of oil were to fall too far too fast.

Mr. Shore: The Chancellor must recall that when he presented his last Budget he described it as a Budget for industry, for jobs and for people. Is he aware that since he presented that Budget unemployment has increased by 270,000 and manufacturing output has fallen by 1½ per cent.? Does he not agree that his Budget judgment was


wholly wrong? What does he intend to do to have some impact on the problem of unemployment and falling output?

Sir Geoffrey Howe: I remind the right hon. Gentleman that the growth in output in the United Kingdom since the spring of 1981—[HON. MEMBERS: "1982".]—1982 is a little over 1 per cent. In Japan there was a rise of 3 per cent., while in all the other countries of the summit seven output fell substantially during that period.
Real demand rose in Britian by 4 per cent. last year. If we are to achieve the growth in output that that makes possible, it is all the more necessary for us to continue to improve our competitiveness.

Industrial Competitiveness

Mr. Campbell-Savours: asked the Chancellor of the Exchequer what was the decline in United Kingdom competitiveness since May 1979, as measured by relative normalised unit labour costs.

Mr. Brittan: Relative actual unit labour costs are probably the best single measure of competitiveness, since they take account of recent improvements in productivity. But United Kingdom relative normalised unit labour costs are now around 15 per cent. worse than in the second quarter of 1979. This deterioration reflects the fact that United Kingdom wage increases have been higher than those of our competitors, as the effective exchange rate is now 5 per cent. below the figure for the second quarter of 1979.

Mr. Campbell-Savours: How is it possible for the Government to claim that their policy is deliberately—rather than accidentally—increasing the competitiveness of British industry when, in reply to my hon. Friend the Member for Blackburn (Mr. Straw) on 22 December, the Government admitted that three-quarters of the 20 per cent. increase in improvement in the cost-competitive position of British industry was derived directly from a fall in exchange rates and other minor factors?
Why does not the right hon. and learned Gentleman come clean and admit that the only developments of any benefit to British industry during the past 12 months derived from exchange rate movements and had nothing to do with the Government's tight monetary policies?

Mr. Brittan: That is simply not true. The cost of labour has increased at a much lower rate than in past years and done well compared with most of our competitors, which is an important part of the progress that has been achieved. The Government's action to reduce industrial costs by such measures as the fall in the national insurance surcharge is also of considerable significance.
The hon. Gentleman is doing less than justice to Britain, never mind the Government, in failing to pay heed to the substantial improvement in productivity, which has had an important effect on industry.

Mr. Richard Wainwright: As the Treasury is at last admitting that it takes the sterling exchange rate into account, will the right hon. and learned Gentleman now tell us what is the Treasury's exchange rate policy?

Mr. Brittan: I am not aware of any new statement that entitles the hon. Gentleman to suggest that there has been any change. He knows that the Government do not have

an exchange rate target, but regard changes in the rate as one of several indicators of the relative tightness or laxity of monetary policy.

Mr. Kenneth Carlisle: Does my right hon. and learned Friend agree that the sharp fall in the rate of inflation has been a major boost to Britain's ability to compete? Is it not true that in May 1979 our inflation rate was higher than that of most of our competitors, and that it is now lower?

Mr. Brittan: There is no doubt that the improvement in inflation during the past year has been to the dramatic benefit of Britain.

Mr. Shore: As the right hon. and learned Gentleman well knows, any dramatic improvements in the past year have come about because the pound is a little more sensibly valued than a year ago. Will he understand that we cannot for long sustain—certainly not to the benefit of Britain—a dishonest pound?
If the right hon. and learned Gentleman does not have an exchange rate policy, he certainly has an interest rate policy. Does he not understand that the rise in interest rates from 9 to 11 per cent. during the past six weeks is imposing an intolerable burden on British industry? Is he aware that not only do we have the highest real interest rate since the war, but that it is higher than in any other country with which we are trying to compete?

Mr. Brittan: The right hon. Gentleman, wittingly or unwittingly, wholly distorted my answer to the last question. I referred to a dramatic improvement in inflation. That has nothing to do with the exchange rate—quite the reverse. The fall in the value of the pound tends to have an adverse effect on inflation, not a favourable one. Therefore, the Government are perfectly entitled to point to the great improvement in inflation.
Any adverse movement in interest rates, when compared with the substantial fall during the past year, would be as nothing compared with the effect on interest rates of the implementation of any of the right hon. Gentleman's policies.

Argentina (Loans)

Mr. Skinner: asked the Chancellor of the Exchequer, further to the reply of the Prime Minister on 20 December, Official Report, c. 352, what progress has been made with the loans by the International Monetary Fund and British banks to Argentina.

The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne): An IMF executive board meeting on 24 January approved Argentina's application for a SDR 1·5 billion stand-by facility in support of an economic stabilisation programme. A drawing of SDR 0.5 billion under the compensatory financing facility was also approved. A short-term bridging facility for $1·1 billion provided by a group of international banks was signed at the end of last year. British banks are participating in this and are taking part in negotiations which are currently in progress for a $1·5 billion medium-term loan.

Mr. Skinner: Is the Minister aware that the Tory Government and the guarantees of the Prime Minister in answer to a question on 20 December have sent a lifeboat to Argentine banks? How do the Government and the Prime Minister reconcile that with the Fortress Falklands policy? Are they not propping up a Fascist regime? The


Government talk about brave boys dying on the beaches, yet they are propping up the Argentine banks with British taxpayers money? What hyprocisy that is.

Mr. Bruce-Gardyne: I hope that the hon. Gentleman feels better for having got that off his chest. May I try to explain to him—

Mr. Skinner: I know exactly what is happening.

Mr. Speaker: Order the hon. Member for Bolsover (Mr. Skinner) asked his question and he must allow the answer to be given.

Mr. Skinner: The question was not answered.

Mr. Speaker: Order. The hon. Gentleman must control himself.

Mr. Bruce-Gardyne: The loans to which my original answer referred have an important contribution to make towards helping Argentina's economic adjustment and thereby safeguarding the health of the international financial system. The purpose is to ensure that Argentina continues to service its existing debts. If it did not, that would create problems for the entire international banking community and have repercussions for British trade.
If the hon. Gentleman does not understand that—

Mr. Skinner: I understand.

Mr. Bruce-Gardyne: —he had better do his homework and learn something about it.

Mr. John Townend: I accept what my hon. Friend said, but is he not aware that there is widespread concern that we are backing loans to Argentina while that country is still spending considerable amounts on rearming? If it was not doing so, it could service its debts.

Mr. Bruce-Gardyne: As the Prime Minister has made clear, the loans are not for arms purchases but to help Argentina to continue to pay its debts. Tight IMF ceilings on both external credit and on credit to the public sector should inhibit the diversion of funds to military expenditure.

Mr. Skinner: It stinks.

Mr. Robert Sheldon: Is the hon. Gentleman aware that there is some dispute over the size of the foreign debt incurred by Argentina, with its central bank disagreeing with its Economic Ministry to the extent of $4 billion? In view of the large packages which the hon. Gentleman mentioned, and which have been supplemented by the news that we had at lunch-time today, should not this serious difference be resolved before these large packages are finally implemented?

Mr. Bruce-Gardyne: I noted the reports in the press to which the right hon. Gentleman referred, but that is a matter for the Argentine authorities to sort out among themselves. We cannot arbitrate between their different estimates, but whatever the exact figure—

Mr. Cryer: What about the ceilings?

Mr. Bruce-Gardyne: —it is clear that Argentina would have been faced with serious debt service difficulties without the arrangements agreed with the IMF, the commercial banks and other creditors. That could not have been in the interests of the international community.

Mr. Jay: As the Prime Minister told us last night that we must not talk to the Argentines until the formal ending of hostilities, is it right that we should lend them such large sums of money?

Mr. Bruce-Gardyne: I am surprised that the right hon. Gentleman, with his experience of these matters, should imagine that it would be in the interests of the international trading community that arrangements should not have been arrived at to enable the Argentine Government to continue to service its national debt.

Sir John Biggs-Davison: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

Free Ports

Mr. Proctor: asked the Chancellor of the Exchequer if he will make a statement on what progress the working party on free ports has made.

Mr. Bruce-Gardyne: The working party has recently visited Rotterdam, Shannon and Hamburg to examine the facilities available in these localities. It has discussed Community rules with a representative of the Commission. In the immediate future visits will be made to a number of traders to examine the facilities currently available in the United Kingdom. In addition, the working party will consider all this evidence together with any additional contributions offered by industrial and commercial interests not directly represented.

Mr. Proctor: I thank my hon. Friend for that helpful and full response. Will he affirm that, contrary to reports in the media, the Government have not taken any financial decision on this matter and that those decisions will be taken on the merits of the scheme, including the extra new jobs which the free ports may provide? Will my hon. Friend give some idea of the time scale of the Government's decision on this matter?

Mr. Bruce-Gardyne: I assure my hon. Friend that he should not believe everything that he reads in the press. I speak from experience. I can give him the assurance that he seeks. The working group is examining all aspects of the issue and is doing so with a completely open mind. Our ambition is to complete our work as swiftly as possible so that if it should be the view of the working group, and if that view is subsequently accepted by Her Majesty's Government, that there is a need for change in existing legislation, provision can be made for that in this year's Finance Bill.

Mr. William Hamilton: If that is the case, why did the hon. Gentleman sack the hon. Member for Aberdeen, South (Mr. Sproat) from the working group?

Mr. Bruce-Gardyne: I was just trying to think who was the hon. Member for Aberdeen, South.—[Interruption.] My hon. Friend the Under-Secretary of State for Trade expressed an interest in attending the first meeting of the working group, and did so. In general, however, the Department of Trade, like other Departments of State, is represented on the working group, and most effectively, at official level. I should tell the hon. Gentleman as well that he should not believe everything that he reads in the papers.

Income Tax

Mr. Soley: asked the Chancellor of the Exchequer by how much the basic rate of income tax would have to be reduced in order to restore the proportion of total taxation, direct and indirect, and including national insurance contributions taken from the income of a family—wife not working, husband in work—with two dependent children on (a) average earnings and (b) 75 per cent. of average earnings to its level in 1978–79, from its level of 1982–83.

The Minister of State, Treasury (Mr. John Wakeham): As my right hon. Friend the Financial Secretary told the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on 23 November, the figures are about 4p and 6p in the pound respectively. Even without such reductions, the take-home pay at all levels of earnings is higher in real terms today than under the last Government.

Mr. Soley: Is it not appallingly misleading to have an increase in taxation of £8 a week, in effect, for the cases that the hon. Gentleman has quoted, when the Tory party claimed that it would cut taxation, but has managed to increase it dramatically at the same time as introducing mass unemployment?

Mr. Wakeham: The fact of the matter is that the overall tax burden has inevitably risen because of the increased public expenditure due to the recession and by the need to keep borrowing under control. The reductions in the high rates of tax on the highest incomes need no excuse. The fact remains that take-home pay at all levels of earnings is higher in real terms than it was under the previous Government.

Sir Brandon Rhys Williams: With regard to family incomes, has my hon. Friend read today's Financial Times and seen the article by Mr. Samuel Brittan recommending an increase in child benefit to £7 a week? Does my hon. Friend agree with Mr. Brittan that
When anti-poverty considerations and economic incentives point the same way, this the very least that is needed"?
At a time when low-paid workers are in dispute over wages, will my hon. Friend and his right hon. Friends bear in mind the attractions of meeting the needs of those with real problems by increasing child benefit, rather than by giving way to blackmail and giving blanket increases in wages?

Mr. Wakeham: I cannot anticipate my right hon. and learned Friend's Budget, but many of the benefits to which poorer families are entitled, such as child benefit, family income supplement, retirement pensions and so on, have gone up more rapidly than inflation since 1978–79.

Mr. Straw: The Minister is up to the Treasury's old trick of breaking statistics. Is he aware, as a result of the questions answered by his colleague, that, as a proportion of average earnings, taxation at every level up to twice the average earnings has risen under the Government? As my hon. Friend the Member for Hammersmith, North (Mr. Soley) said, the average family is paying £8 a week more in taxation than it was before. Is not the truth that the burden of taxation has risen so much under this Government that to get it back to its level under Labour would cost not 6p off income tax, but 9p, or £9 billion?

Mr. Wakeham: Although the hon. Gentleman is correct in saying that the proportion has gone up, the real level of take-home pay has gone up. My constituents live on their take-home pay.

Economic Forecast

Mr. Foster: asked the Chancellor of the Exchequer what prospects he sees for the recovery of the economy.

Sir Geoffrey Howe: Although developments in the world economy have continued to hold back recovery at home, average GDP was 0·75 per cent. higher in the first three quarters of 1982 than a year earlier. Lower inflation and better productivity are providing a basis for a strengthening and sustainable recovery. The forecast published in the autumn statement was for growth of 1·5 per cent. in GDP in 1983.

Mr. Foster: Is the Chancellor aware that his absurd wild goose chase after sound money has imposed the lowest level of industrial production for 17 years? Why does he not now abandon his three-year mirage hopping predictions of recovery and argue for a co-ordinated boost for demand in the Western world and give some hope of jobs to my constituents in the northern region?

Sir Geoffrey Howe: I understand, and the House understands, the emphasis that the hon. Gentleman places on the prospects for sustainable growth in employment. However, I remind him that during the first two years of his Government, which the right hon. Gentleman the Leader of the Opposition described as a period of signal success, unemployment doubled, while inflation rose by 27 per cent. and earnings rose by 30 per cent., and it was only after reference to the IMF that the policies could be put back to a sensible form. This is the first Government since the war to pass on a lower average rate of inflation than they received from their predecessors. We do not intend to change that.

Mr. Roy Jenkins: If the right hon. and learned Gentleman persists in regarding the lower rate of inflation as almost the only factor necessary for recovery for this and other economies, will he explain why the inter-wars period, which was a period of low, sometimes zero, inflation, and sometimes negative inflation, was so markedly less successful economically than the 25 years from 1948 to 1973?

Sir Geoffrey Howe: The right hon. Gentleman could draw a number of different conclusions from that analysis. He must recollect that inflation was falling at the beginning of the 1930s. The 1930s was, in fact, a period of little, or zero, inflation. We have experienced one of our most substantial growth periods during this decade. I must remind the right hon. Gentleman that since the spring of 1981 growth in this country has been moving forward, in contrast to that in almost every country in the summit seven. It is by laying the foundation to bring down inflation and by continuing to improve other supply conditions in the market, including emphasis on the need for pay moderation, that we shall secure both growth and sustainable employment.

Mr. Rippon: My right hon. and learned Friend referred to the state of the world economy. Can he say what action the Government are taking to follow up the suggestion of the United States Secretary of the Treasury that there


should be a new Bretton Woods-style conference to bring about greater monetary stability and to stimulate world trade?

Sir Geoffrey Howe: The suggestion of the United States Treasury Secretary for a new Bretton Woods-style conference is not to be taken literally, for very sensible and practical reasons. There is no purpose in our trying to reassemble a conference of the kind which, at the end of the war, established the present international financial institutions, when they are already in place. We need, of course, to improve and strengthen them. It is that among other things to which I shall be devoting my attention as chairman of the interim committee. One objective—it was among those set out at Bretton Woods—is to move towards a world of greater stability of exchange rates. That, again, is something that I shall have in mind.

Mr. Shore: The right hon. and learned Gentleman must be aware that in talking of the international trade prospect, which is undoubtedly very gloomy, the pursuit of his own policies in the last three-and-a-half years, and the active advocacy of those policies to other countries, means that he has contributed in a marked degree to the world recession about which he now complains. In recalling what he sees as the record of his Government, is he not aware that GDP in this country has fallen by 5½ per cent. since the second quarter of 1979? Can he think of any other country in the world, let alone a country that has become an oil exporter, that has suffered anything like a comparable disaster in the same period?

Sir Geoffrey Howe: The right hon. Gentleman knows that the growth performance of this country over many years has been significantly below that of other countries. It is therefore inevitable that, at a time when growth throughout the world is falling, we should suffer initially more seriously because of our history. I come back to the fact that our growth performance now shows the prospect of moving ahead of other countries. It is virtually universally agreed that until the world succeeds in establishing success against inflation it will not be possible to lay the conditions in which growth can begin to be resumed. It is on that basis that the world outlook is now beginning to improve.

Industrial Competitiveness

Mr. Eggar: asked the Chancellor of the Exchequer when he next intends to meet the Confederation of British Industry to discuss the level of international competitiveness.

Mr. Brittan: My right hon. and learned Friend's next planned meeting with representatives of the CBI is at the meeting of the NEDC on Wednesday 2 February, when it is likely that the discussions will touch on competitiveness.

Mr. Eggar: Has my right hon. and learned Friend noted the CBI's Budget representations, which, not surprisingly, urge more assistance to industry? While there may be a case for assistance to specific areas of industry, for example energy intensive industries, surely the overwhelming argument that my right hon. and learned Friend should be considering is the need for more assistance for income tax payers, particularly by raising the threshold?

Mr. Brittan: I am grateful to my hon. Friend for giving his views on the CBI's representations. A balance has to be made. That will be made by my right hon. and learned Friend in due course when he comes to determine his Budget decisions.

Mr. Newens: Does not the right hon. and learned Gentleman agree that the dismal economic climate and the low level of demand brought about by the Government's economic policy has made matters infinitely more difficult for British industry in facing international competition?

Mr. Brittan: No. I do not agree. I think quite the reverse. The readiness of the Government to tackle the fundamental and deep-seated problems of the British economy by dealing with inflation and taking action to remove the restraints on industry on the tax side and on the control side is setting in train a situation that will lead us to advance out of recession in far better shape than our competitors.

Mr. Charles Morrison: Is my right hon. and learned Friend aware that some of us hope that the Chancellor will be able not only to raise thresholds but to help the competitiveness of industry, on which the future good health of the country relies?

Mr. Brittan: I accept that this, too, is an important consideration to bear in mind in formulating the Budget.

Mr. Horam: Does the Minister still believe that industrial recovery is just around the corner?

Mr. Brittan: It is the hon. Gentleman rather than I who is stuck in a record groove. We stand by the forecast that we made in the autumn statement of a modest improvement in the economy in the course of 1983.

Stamp Duty

Mr. Chapman: asked the Chancellor of the Exchequer what was the yield from stamp duty charged on the purchase of dwelling units in 1981–82.

Mr. Wakeham: The estimated yield from transfer of residential property in 1981–82 was £315 million. The yield this year is likely to be slightly less because of the increase in the threshold in March 1982.

Mr. Chapman: I appreciate that the thresholds were raised in the last Budget. May I ask my hon. Friend to bear in mind that this impost is a considerable additional burden for many purchasers of properties? Will he promise to communicate to the Chancellor of the Exchequer in good time before 15 March the fact that many people think that it would be fair and reasonable if the raising of the thresholds of this tax became a continuing and annual process?

Mr. Wakeham: I shall get my hon. Friend's message across. It has not been the practice to increase the stamp duty threshold each year. House prices have not increased very significantly over the past year. It should be borne in mind that two-thirds of house purchasers do not pay stamp duty.

Mr. John Townend: Does my hon. Friend agree that without indexation the burden increases, particularly for those who have to move to find jobs? At a time of high unemployment, should not the Government increase the threshold?

Mr. Wakeham: My right hon. and learned Friend increased it last year. As a result, there are now about the same proportion of home buyers paying stamp duty as there were in 1973. About 90 per cent. of house purchasers get the benefit of the threshold and reduced rate band.

European Community (Budget Refund)

Mr. Spearing: asked the Chancellor of the Exchequer if he will make a statement concerning the current state of negotiations related to United Kingdom refunds from the European Community.

Mr. Bruce-Gardyne: As the House will recall, the European Parliament rejected on 16 December the Council's draft supplementary and amending budget for 1982 making provision for the United Kingdom's basic refund for 1982. The Council has this week considered new budgetary proposals prepared by the Commission and will now be holding informal discussion with the Parliament prior to establishing a new draft supplementary budget for 1983. It is hoped that this can be established in time for formal consideration by the Parliament in the week beginning 7 February.

Mr. Spearing: Does the Minister agree that out of the £13,000 million EC budget, this country contributes about £2,000 million and gets back about £1,000 million? Does he further agree that the discussions he has mentioned in respect of the proposals of the Council for a £400 million additional rebate to this country is subject to the consultation procedure, agreed between the Council and the Assembly in Paris last summer, which requires both of them to agree? Is it not a fact, in that case, that the Assembly has a veto on this sum due to the United Kingdom?

Mr. Bruce-Gardyne: I agree with the hon. Gentleman that the present constitution of the budget between the member partners of the Community is unsatisfactory. That is why Her Majesty's Government have persistently pursued the objective of a long-term solution. The hon. Gentleman will recall that the Parliament shares our ambition in that respect. This is precisely what the Parliament has called upon the Council of Ministers to achieve. The negotiations with the Parliament must now proceed.

Mr. Spearing: Has it got a veto?

Mr. Bruce-Gardyne: I should point out to the hon. Gentleman that the Commission has already lodged in a separate fund in London the payments that were due in respect of the last financial year.

Mr. Jim Spicer: Does my hon. Friend agree that a time limit must be placed on the negotiations? He has said that consultations will take place again in February. Is it not a fact that it is within the power of the European Parliament to drag this out for months? Would that not be quite intolerable and unacceptable to most hon. Members?

Mr. Bruce-Gardyne: I agree with my hon. Friend that it is our purpose to see the conclusion of these negotiations and the payment of the sums agreed in respect of 1982 as soon as possible, but I do not think that we should, at this stage, speculate about actions that might need to be taken in the event of failure to achieve such an agreement in due time.

Mr. Straw: Has the Minister seen the report in today's Financial Times to the effect that, far from the European Assembly seeking to co-operate with the Council and the United Kingdom Government, the president of the assembly, Mr. Pieter Dankert, is setting his face against a settlement except on wholly unacceptable terms, including no special budget deal with Britain after this year? Given the point made by the hon. Member for Dorset, West (Mr. Spicer) that the assembly can drag this out and veto any attempted deal by the Council, when, instead of talking tough, will the Government act tough and refuse to pay any further money over to the EC until we get a proper deal?

Mr. Bruce-Gardyne: Our right to what the hon. Gentleman describes as "a proper deal" has been recognised by the Council of Ministers. I must reiterate that, whatever the president of the assembly may have said, the assembly has been demanding that there should be a long-term solution to the budget problem. That is precisely the objective of Her Majesty's Government as well. So we share an objective with the Parliament and we want to see that objective achieved as soon as possible.

Manufacturing Output

Mr. Dykes: asked the Chancellor of the Exchequer if he is satisfied with the recent performance of the economy in terms of gross domestic product growth and output by manufacturing industry.

Sir Geoffrey Howe: Recent figures, particularly for manufacturing output, confirm that there was a hesitation in the recovery last year, partly reflecting the unexpected length and depth of the world recession. But with lower inflation, improved competitiveness, and the prospect of some growth in the world economy, the outlook for 1983 is for a modest rise in output.

Mr. Dykes: As the economy clearly did not bottom out in April 1981, does my right hon. and learned Friend feel that the latest CBI proposals understate or overstate the need for new resources in the economy?

Sir Geoffrey Howe: Contrary to what my hon. Friend says, there has been growth in output in the economy since the second quarter of 1981. Indeed, growth during that period, as I have already said, exceeded that in all seven summit countries except Japan. I shall, of course, consider the representations made by the CBI.

Mr. Cook: Is there nothing that can pierce the right hon. and learned Gentleman's complacency? Is he not aware that last week's disastrous output figures show that house completions were at their lowest level since 1947, that the output of commercial vehicles was at the lowest level since 1953 and that steel output was lower than in Poland? As the output of manufacturing industry has fallen by 2 per cent. since the right hon. and learned Gentleman last assured me that we were at the end of the recession, would he care to tell the House when he expects us finally to reach the end of the recession?

Sir Geoffrey Howe: The hon. Gentleman must take account of the factors that I have already pointed out. There was growth in output between the first three quarters of last year and the first three quarters of the preceding year. During last year there was a 4 per cent. growth in real demand in our economy. There is expected to be a


growth in real demand in the economy in the year ahead. The key factor is for British manufacturers and producers to go on improving their competitiveness so that British goods fill a larger rather than a smaller share of that market.

Tourism

Mr. Hicks: asked the Chancellor of the Exchequer if he will introduce further fiscal measures aimed at stimulating the development of tourism in the United Kingdom; and if he will make a statement.

Mr. Wakeham: A number of Budget representations on the tourist industry have been received, which are being considered in the normal way.

Mr. Hicks: As the tourist industry provides employment for more than 1·5 million people and in 1981 attracted more than 11 million visitors to Britain, who spent £3 billion in valuable overseas currency, does my hon. Friend agree that there is an extremely strong case in the forthcoming Budget to increase the level of industrial building allowances for hotels to 50 per cent. and to make additional funds available for section 4 aid for approved tourist projects?

Mr. Wakeham: Those are among some of the representations that we have received and are being examined in the normal way.

Civil List

Mr. William Hamilton: asked the Chancellor of the Exchequer if Her Majesty's Government will make it their policy when bringing forward proposals for increases in annuities to recipients on the Civil List for 1983–84, to reduce the proposed amount of each increase by the amount in excess of the rate of inflation by which that annuity was increased in 1982–83.

Sir Geoffrey Howe: No; this policy is neither appropriate nor necessary. The policy is to increase annuities to recipients on the Civil List in line with increases in other public service cash limits and this policy will continue for 1983–84. Details will be published when the Supply Estimates are presented to Parliament in March.

Mr. Hamilton: Since the right hon. and learned Gentleman lays great stress on the need for restraint in wage and income demands and would prefer ideally a nil increase this year, would it not be a wonderful example for him to set by having a nil increase for these particular well-heeled individuals?

Sir Geoffrey Howe: The hon. Gentleman should remember that annuities are paid to members of the royal family largely to meet their official expenses, which includes the wages and salaries of staff necessarily employed. The whole House would prefer to conclude that the economical nature of the arrangements for the support of the monarchy in this country would stand comparison with those for any head of state in any other country in the world.

Oral Answers to Questions — PRIME MINISTER

Engagements

Ql. Mr. Tony Speller: asked the Prime Minister if she will list her official engagements for Thursday 27 January.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Speller: To minimise the health hazard through broken pipes in the water supply, does my right hon. Friend agree that, where the strikers have refused to do such repairs, they should be put out to private contract?

The Prime Minister: Private contractors are certainly one option, but I think it would be far better if the unions were to end this unjustified strike, especially hearing in mind that they have been offered on average £145 a week by an independent mediator to whose appointment they agreed. Most people will feel that with that on offer, it is totally unjustified to put the elderly, children and everyone else in great difficulty with water supplies.

Mr. Roy Jenkins: On the issue of arms control, will the Prime Minister tell us what is now her exact position on the zero option? Is it as rigid as it was before Christmas, that it is that or nothing, or has she modified it?

The Prime Minister: I do not think that the right hon. Gentleman has heard what I have said on a number of occasions. Zero is the very best option, because it would mean none of a whole class of nuclear weapons on either side. There is no substitute for that as the best option. But right back at the time of the NATO double track decision in December 1979 we agreed that we should have to have equal numbers on both sides, and President Reagan came in with the zero option later. So if we cannot get zero we are back to equal numbers on both sides, but equal numbers must be carefully counted. There must be no bogus counting.

Mr. Jim Spicer: Has my right hon. Friend yet had an opportunity to speak to the genuine representatives of the fishing industry to establish their reaction to the common fisheries agreement, which was reached in Brussels earlier this week?

The Prime Minister: I understand that the three main organisations of the fishing industry are very well pleased with the excellent arrangements reached by my right hon. Friend the Minister of Agriculture, Fisheries and Food and my right hon. Friend the Minister of State this week. It is very good news that, after seven years, we have managed to reach a common fisheries policy and I hope that one day it will be followed by a proper budget solution as well.

Mr. Foot: Has the right hon. Lady had time today to study the answer that was given to my hon. Friend the Member for Stockport, North (Mr. Bennett) to the effect that, according to the latest figures, there are 1,700,000 children in families forced to live on supplementary benefit, on the poverty line? Does she not agree that something must be done immediately to deal with this problem? What will she do in the Budget?

The Prime Minister: Really, the right hon. Gentleman knows that he has to wait for any pronouncements in the


Budget. That has been so under all Governments. He equally knows that, as under this Government, so under his Government, the numbers of children of the unemployed on social security benefit increased, and increased substantially. The answer is not so much what we can do on social security, where our record is that social security benefits have in fact kept pace with inflation—[Interruption.] On social security. I was very
careful in what I said. I said it precisely, if right hon. and hon. Gentlemen would listen carefully. We have to try to get industry and commerce in a better state so that they can compete and can sell goods the world over.

Mr. Foot: Does the right hon. Lady accept that the terrible figure of 1,700,000 represents nearly a doubling of the figure since she came into office and became responsible for these matters? Apart from the increasing unemployment, which, of course, has contributed to the total, the other factors in reducing the standard of life, especially of children who have to live in these conditions, are the cut in the real value of child benefit and the cut in the real value of unemployment benefit. I am asking the right hon. Lady to say that something will be done in the next Budget to help some of the poorest people.

The Prime Minister: The standard of social security payments is about double what it was in real terms when it was introduced in 1948.

Mr. Heddle: asked the Prime Minister if she will list her official engagements for Thursday 27 January.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Heddle: In view of the talks that are taking place in Geneva and the fact that nuclear disarmament is the most important item on the world agenda, does not my right hon. Friend find it curious that someone who aspires to the prime ministership of one of the most important countries within the North Atlantic Alliance found it possible to go to Moscow recently but has not found it convenient to visit Washington for the past 28 years?

The Prime Minister: I think that all previous Leaders of the Opposition have realised the importance of the relationship between Britain and the United States. I hope that the Leader of the Opposition, holding a statutory office as he does, will soon repair the omission.

Rev. Martin Smyth: Will the right hon. Lady take some time out of her busy schedule to communicate to the President of the Irish Republic the concern felt by the House that the British embassy was bugged by, as I understand it, a previous coalition Administration?

The Prime Minister: Inquiries are being made and will be made. I am not quite certain what the facts are. I have read the reports.

Mr. du Cann: In view of the action that the European Parliament is taking to deny the United Kingdom the receipt of refunds from its budget contributions, will my right hon. Friend today consider netting-off, in the sense of withholding our own conributions to the European Community?

The Prime Minister: I share my right hon. Friend's concern about the action of the European Parliament in that it has said that we cannot have our 1982 refunds in full unless a lasting solution is reached for the 1983 refunds.
We, too, would like to have a lasting solution to the 1983 refunds and we have been trying to find one, but the matter is not wholly within our power to bring about. We hope, therefore, that both matters will be resolved—both the 1982 refunds and a lasting solution from 1983 onwards—by negotiation so that there can be no question of withholding. I shall be raising the whole matter of the budget, which is extremely important to this country and to the health of the Community, at the European Council.

Mr. Newens: Has the right hon. Lady approved the involvement of British banks in raising loans for Argentina, especially when Argentina's indebtedness was partly due to the purchase of arms that were used against our people in the Falklands? If she does approve of it, does this position accord with the stand that she took in the House yesterday?

The Prime Minister: I understand the hon. Gentleman's concern. I believe that there have been questions about the matter to my right hon. and learned Friend the Chancellor of the Exchequer. As the hon. Gentleman will know, Argentina's indebtedness is part of the indebtedness of the Latin American countries. It is part of the problem of the present world banking crisis. It is being resolved through the IMF—

Mr. Newens: With British banks.

The Prime Minister: We are part of the IMF and it is being resolved through the IMF by a programme agreed with the IMF. Will the hon. Gentleman please realise that I understand why he is worried, and so am I? Equally, I must say to him that it is not in our interests that there should be defaults either on capital or interest on any of the debts of Latin America.

Mr. Foot: Does the right hon. Lady's reply mean that, while she is not prepared to talk to anybody in Argentina, she is prepared to join others in lending Argentina money?

The Prime Minister: I do not think so. I think that the right hon. Gentleman must take fully into account what I have said. Argentina now has an agreement through the IMF and it is not in the interests of the banking system that there should be a default with the situation as it is. In the sense that British banks are taking part, they are doing so because it is in the interests of this country and of the Western financial system.

Mr. Foot: Bearing in mind the hostility that was expressed on both sides of the House about this matter a few minutes ago, will the right hon. Lady come to the House again and reverse this policy? Will she then tell us that we shall stop any loans from this country until hostilities have ceased?

The Prime Minister: I share such feelings—right hon. and hon. Members must accept that—but it is not in the interests of the financial system of this country or the West—

Mr. Campbell-Savours: Hypocrisy.

The Prime Minister: —that there should be default on either interest or on capital. If there were, the consequences would be very serious. The money is not lent for armaments. It is lent on condition that Argentina follows an economic policy that has been approved by the IMF. Ultimately, it is in the interests of this country that we subscribe to the IMF.

Mr. Foot: If we lend money to Argentina, what control does the right hon. Lady have over how it spends that money?

The Prime Minister: I accept that if one lends money for one purpose it releases money for another purpose—[Interruption.]

Mr. Skinner: Absolutely—Exocets.

The Prime Minister: It is not in the interests of this country to bring about a collapse of any bank or banks. If the right hon. Gentleman wished to pursue that policy, he would have to be responsible for the disastrous consequences that would ensue.

Mr. Cryer: Banks before people.

Mr. Durant: Will my right hon. Friend welcome the statement made by the general manager of Abbey National that it will be holding its interest rates for at least the next six months?

The Prime Minister: I do indeed. I thought that it was excellent news, together with some of the other services that the Abbey National is thinking of offering.

Mr. Stan Thorne: asked the Prime Minister if she will list her official engagements for 27 January.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Thorne: Would the Prime Minister care to visit the garden gate at Flint End, Durrants Lane, Berkhampstead to extricate the Secretary of State for Employment from his conflict with the local building industry?

The Prime Minister: No, Sir.

Sir Nicholas Bonsor: Reverting to what we were talking about earlier, will my right hon. Friend confirm that Her Majesty's Government are prepared to negotiate with Argentina on everything except the question of sovereignty of the Falkland Islands?

The Prime Minister: I confirm what I said yesterday about that. We would wish to negotiate on matters of trade, but Argentina refused to do so and that, of course, we must accept.

Mr. Radice: Will the right hon. Lady take time off today to tell her Secretary of State for Employment to stop his ill-informed and frivolous intervention in the democratic machinery of my union, the General and Municipal Workers Union? Is she aware that the rule on ballots quoted by the Secretary of State refers to branch action, which does not yet have the endorsement of the national executive? Is she aware that the executive

introduced a ballot in which 80 per cent. of the members participated and that what is normally a responsible body of men voted 3:1 in favour of a strike? Is it not time that the Government stopped playing party politics with the water dispute and got genuine negotiations going?

The Prime Minister: I support my right hon. Friend the Secretary of State for Employment in what he said. I understand that the hon. Member for Chester-le-Street (Mr. Radice) might be an official of that union. I am not sure, because he did not say so.

Mr. Radice: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I shall take the hon. Gentleman's point of order now, but he has only to wait a moment until the Prime Minister sits down, when I shall call him to make his point of order.

The Prime Minister: The hon. Gentleman knows that the unions agreed to the appointment of the mediator. He has now pronounced what he is prepared to recommend what amounts on average to £145 a week. That is an average. Some water workers will get more and, of course, some will get less. That average offer of £145 a week was made by the mediator whose appointment the unions agreed. Under those circumstances, I hope that the hon. Gentleman will agree that this strike and its continuation is unjustified.

Mr. Radice: On a point of order, Mr. Speaker. I said quite plainly that I was a member of the General and Municipal Workers Union. I said that it was my union.

Mr. Michael Hamilton: On a point of order, Mr. Speaker. Out of 36 questions tabled to the Prime Minister today we have reached only No. 3. We are all interested in what the Leader of the Opposition has to say, hut I think that he rose six times today. It would help Back Benchers on both sides of the House if you, Mr. Speaker, imposed some restraint on the number of times that he asked questions.

Mr. Maxton: On a point of order, Mr. Speaker. I am aware that you have considerable difficulty when the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) rises during Prime Minister's Question Time, because as he is the leader of a so-called political party you have some obligation to call him. However, would it be possible for you to have a quiet word with him and suggest that today, and certainly since Christmas, he has been abusing his position in that respect?

Several Hon. Members: rose—

Mr. Speaker: Order. I am accustomed to points of order about hon. Members being called to speak, but not about stopping them being called.

Haemodialysis (Contingency Plans)

Mr. Laurie Pavitt: (by private notice) asked the Secretary of State for Social Services what contingency plans he has made for the continuation of haemodialysis in hospital renal units in the event of diminution of water supplies.

The Minister for Health (Mr. Kenneth Clarke): It is agreed by both sides in this dispute that every effort should be made to avoid industrial action which would prejudice public health and public safety. We do not at this stage, therefore, expect there to be any prolonged interruption in water supplies to renal units. Health authorities have, however, been advised to make contingency plans for hospitals generally which might include transfer of patients to hospitals which are least likely to be affected.

Mr. Pavitt: May I turn the Minister's attention away from the emphasis on kidney machines in hospitals to the successful policy that successive Administrations have carried out for dialysis in the home? Is he aware that, in the event of patients at home being unable to continue using their kidney machines, they will either die or have to be transferred to a renal unit?
Therefore, has the hon. and learned Member made contingency plans for district health authorities to inform water authorities where those paients' homes are? Secondly, has he laid on the necessary extra ambulance service? Thirdly, is he aware that already overstretched renal departments are short of nursing and technical staff and will be forced to maintain a 24-hour dialysis programme? Will he take contingency measures to increase the nursing provision in renal units that may be called upon to accept many renal failures that have previously been dealt with successfully by home haemodialysis?

Mr. Clarke: I am glad to say that both health and water authorities have updated lists of patients on home dialysis. If there is any interruption to supplies to the homes of such people, it will be treated as an emergency. I am also glad to say that there have already been a couple of instances where, I understand, water supplies have been restored to those districts where it is known that a home dialysis patient is living. If there were an interruption to water supplies, it would be necessary to transfer patients to hospital. I am satisfied that hospital renal units can cope with any foreseeable event unless there is a prolonged and general interruption of the water supply. I am glad to say that both sides in the dispute agree that such cases should be treated as an emergency. That arrangement has worked so far.

Mr. Ronald W. Brown: Is the Minister satisfied that water authorities can provide the required number of water tankers in an emergency? Is he aware that I am given to understand that Thames water authority is able to supply one hospital in my area that has 13 units but that it will not be able to supply other areas in London in which there are some 14 hospitals? Does he therefore agree that the urgency is to make contingency plans to provide the necessary water tankers?

Mr. Clarke: The unions have undertaken to meet those emergency needs. So far, I have no reason to believe that any grave crisis has occurred anywhere. Hospitals are treated as emergency cases, but most of them can cope with a short interruption. They may have to transfer patients or restrict admissions if supplies are interrupted for more than 24 hours. I repeat that both sides in the dispute agree that emergency requirements should be met and that there should be no threat to public health.

Business of the House

Mr. Michael Foot: Will the Leader of the House state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 31 JANUARY—There will be a debate on a motion on the fishing industry.
The relevant orders and documents will appear in the Official Report.
Motion on EEC Document 5326/82 on insurance against civil liability in respect of the use of motor vehicles.
TUESDAY 1 FEBRUARY—Remaining stages of the Transport Bill (Allotted Day).
WEDNESDAY 2 FEBRUARY—There will be a debate until about seven o'clock on the youth training scheme, and afterwards a debate on trade.
The House will be asked to agree the Civil and Defence Votes on Account and the Winter Supplementary Estimates.
Proceedings on the Representation of the People Bill [Lords], which is a consolidation measure.
THURSDAY 3 FEBRUARY—Opposition day (6th Allotted Day). There will be a debate on an Opposition motion on the report of the Serpell committee on railway finances.
Motion relating to the Supply of Services (Exclusion of Implied Terms) Order.
FRIDAY 4 FEBRUARY—Private Members' Bills.
MONDAY 7 FEBRUARY—Proceedings on the Consolidated Fund Bill.

Mr. Foot: May I put a few matters to the right hon. Gentleman that arise out of the replies given to questions a few minutes ago? First, the Prime Minister said that there was British participation in loans to Argentina. That gives rise to anxiety on both sides of the House, as was shown by the questions that were asked a few minutes before the Prime Minister came into the Chamber today, especially in the light of undertakings that she gave before Christmas.
I hope that the Leader of the House will ensure that the Prime Minister makes a further statement in the house next week about that matter. It obviously gives rise to considerable anxiety, especially when she is saying that no talks must take place until Argentina properly recognises the end to hostilities. There should be a statement on the subject.
The right hon. Member for Taunton (Mr. du Cann) mentioned the impasse with regard to the EC budget. I hope that the House will take note of what he said, because it is what the Opposition have been urging for a long time. If we are to be taken seriously on the subject, the Government should make a statemet about how they will deal with the problem. I hope that a statement will soon be made on that subject.
There has been a breakdown in the talks between Belize and Guatemala. At the same time, President Reagan is insisting that he will continue to send arms to Guatemala. There is considerable concern in the Government of Belize. We have British troops there, partly to guarantee the integrity of Belize. We all know that the situation has been delicate for many months, indeed several years. In the light of that breakdown, the Government should make an early statement.
As we have often suggested and urged before, there should be a full day's debate, or perhaps a longer debate, on disarmament. The discussions open in Geneva today. There is widespread interest and concern throughout the House and the country on the subject. I hope that the week after next there will be a major debate in the House on disarmament so that hon. Members can put their views.

Mr. Biffen: I shall ensure that the right hon. Gentleman's remarks on loans to Argentina are drawn to the attention of my right hon. Friend the Prime Minister.
As to how the House should be best informed of the continued discussions on the EC budget and the British contribution, my right hon. and learned Friend the Chancellor of the Exchequer will of course be anxious to keep the House informed by statement for a host of reasons, some of which were touched on by my right hon. Friend the Member for Taunton (Mr. du Cann).
I shall draw to the attention of my right hon. Friend the Foreign Secretary the interest that the right hon. Gentleman has evinced in our relations with Belize and the relationship between Belize and Guatemala. I am certain that that interest is widely held in the House.
Future debates on disarmament take on topicality by virtue of the resumption of the Geneva talks. I cannot promise that there will be a debate next week. As to thereafter, that is a matter that we can discuss. However, as I have said hitherto, that subject need not be debated solely in Government time.

Sir Paul Bryan: Has my right hon. Friend noted that on Thursday next I propose to devote the Adjournment debate to the important question of overseas student fees? As the Government are belatedly coming to important decisions on the subject, can my right hon. Friend arrange for Ministers from each of the Departments concerned—the Department of Trade, the Foreign Office and the Department of Education and Science—to be present so that they may have the benefit of my advice and that of other hon. Members who will take part in the debate?

Mr. Biffen: I congratulate my hon. Friend on his good fortune in having the Adjournment debate on Thursday. He is a most formidable advocate. I shall ensure that his message is passed on to the quarters that he mentioned.

Mr. James Hamilton: Bearing in mind the despondency, irritation and demoralisation among the people of Lanarkshire and Scotland as a whole as a result of the statements that have been made by the Secretary of State for Industry and the chairman of the British Steel Corporation about Ravenscraig, will the corporate plan for the steel industry, which is vital to the people of Scotland, be presented next week, with a view to ensuring that the steel industry in our country continues?

Mr. Biffen: I appreciate that the hon. Gentleman speaks with great feeling in the light of the situation affecting his constituency, which also touches steel manufacturing areas throughout the United Kingdom. The British Steel Corporation's corporate plan for 1983–86 has still to be received by my right hon. Friend the Secretary of State for Industry. At the moment I cannot go further than that.

Mr. John Roper: Can the Leader of the House tell us whether the Home Secretary will lay before the House next week the immigration rules in their revised form, and may we expect an early debate on the subject?

Mr. Biffen: No, I cannot confirm that. However, I dare say that all will be revealed before too long.

Sir John Biggs-Davison: In view of our exchanges just before Christmas, may we have a statement next week or a paper on the constitutional questions raised by the conduct of the Northern Ireland Assembly and its Committees?

Mr. Biffen: I acknowledge at once the importance of the point that my hon. Friend has raised. I shall pass on his anxieties to my right hon. Friend the Secretary of State for Northern Ireland.

Mr. Frank Hooley: Will the Winter Supplementary Estimates fall to be considered under the new procedure recommended by the Select Committee on Procedure (Finance) and approved by the House last Session? If so, shall we receive any guidance from the Liaison Committee on how the matter should be handled?

Mr. Biffen: I am grateful to the hon. Gentleman. It might be helpful if the House were aware that it was agreed that the Liaison Committee should decide, following consultation, whether it would be appropriate to have an Estimates day during which certain Estimates could be debated. I am informed that the Liaison Committee decided against recommending any of the Winter Supplementary Estimates for debate, but that gives no guide for the future.

Mr. John Silkin: The Leader of the House will have heard the debate yesterday and will have been aware of the exchanges between my hon. Friend the Member for Harlow (Mr. Newens) and me, on the one hand, and the Prime Minister, on the other, on the supply of arms by this country at this very moment to Argentina, although Argentina has not ceased hostilities. Can he arrange for the Secretary of State for Defence to make a statement tomorrow on that aspect? It is a worrying matter not only for us but for the country.

Mr. Biffen: I shall draw the attention of my right hon. Friend the Secretary of State to the right hon. Gentleman's point. Perhaps the matter could proceed through the usual channels.

Several Hon. Members: rose—

Mr. Speaker: Order. Before I call anyone else, I should like to say to the hon. Member for Sheffield, Heeley (Mr. Hooley) that on Monday I hope to make a statement about the way in which we shall conduct our debates on the Consolidated Fund under the new system.

Mr. Harry Greenway: Has my right hon. Friend had an opportunity to notice that on Monday 7 February seven questions are tabled to the Secretary of State for Wales, to which nearly 40 minutes have been allocated for answer, one to my hon. Friend the Member for Wokingham (Sir W. van Straubenzee), who represents the Church Commissioners, for which five minutes is allowed, and 11 to the Minister for the Arts, for which there is a maximum of 10 minutes? Bearing in mind that Wales is represented at most by 36 Members, who seem

to have little interest in Question Time, with due deference to you, Mr. Speaker, and all Welsh Members, and that London has 92 Members, will my right hon. Friend invite the Welsh Members to allocate from time to time a period of theirs to London Members for a London Question Time?

Mr. Biffen: Not without much clearer evidence of an overwhelming desire for such a dangerous innovation.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call the hon. Members who have been rising in their places. I hope that they will be brief and to the point.

Mr. Harold Walker: Although the debate on youth training is welcome and long overdue, it is only part of a wide range of matters covered by the Government's White Paper on the new training initiative. When my right hon. Friend the Leader of the Opposition pressed for a debate a few weeks ago, he specifically asked for a debate on the new training initiative. Will it be permissible on Wednesday to have a wider debate than a debate within the narrow confines of the youth training scheme, important as it is, so that we can raise some of the other important matters?

Mr. Biffen: I can best help the right hon. Gentleman by saying that the debate arises on the motion for the Adjournment. The interpretation thereafter must be for the Chair.

Mr. John Evans: Has the attention of the Leader of the House been drawn to early-day motion 234?
[That this House, bearing in mind the Order relating to the provision of financial assistance to people who have purchased Airey-type industrialised houses, and who are now faced with considerable expense due to premature deterioration, which received the approval of this House on Monday 24th January, calls upon Her Majesty's Government, as a matter of urgency and impartiality, to extend the provisions of this Order to cover people who have bought housing accommodation from their local authority built by other industrialised systems, and to local authorities dealing with this problem in the properties that remain in their control.]
The motion refers to industrialised housing. It was tabled by my hon Friend the Member for Leeds, West (Mr. Dean) and other of my right hon. and hon. Friends. Is the right hon. Gentleman aware that if he can persuade the Secretary of State for the Environment to bring in a new order covering all those who have purchased industrialised housing he will have the support of many Opposition Members?

Mr. Biffen: As the hon. Gentleman appreciates, this matter was debated on Monday and an Adjournment debate will take place early next week. I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for the Environment.

Mr. Andrew F. Bennett: Has the Leader of the House had an opportunity to see early-day motion 244 which calls for an inquiry to be set up into the allegation made in the report "Poor Law" about "Operation Major" in Oxford on 2 September?
[That this House, gravely concerned at the allegations made in the report "Poor Law" into "Operation Major" in


Oxford on 2nd September 1982, calls upon Her Majesty's Government as a matter of urgency to carry out an enquiry into these allegations.]
Would the right hon. Gentleman arrange for a Minister to make a statement to the House or for the motion to be debated at an early opportunity since there are serious allegations about the way in which the police and the social security authorities behaved on that occasion?

Mr. Biffen: I am unable to promise any Government time for an early debate on this topic. It is suitable for the private enterprise initiative of an Adjournment debate.

Mr. Doug Hoyle: Has the right hon. Gentleman seen early day motion 240, signed by 102 Members?
[That this House expresses serious concern over recently-announced closures in the United Kingdom paper industry, particularly the closure of mills in the Trinity, Wiggins Teape and Thames Board Mills Groups; understands that the underlying reasons behind these closures of high energy costs and heavy duty oil tax, in comparison to foreign competitors, cheap imports being the dumped surplus capacity of the industry's competitors, are well known to Government and have been emphasised by many honourable and Right honourable Members in debate and at Question Time; and therefore urges the Prime Minister to give Cabinet consideration to a programme of constructive intervention to give support and protection to the British papermaking industry before its total eclipe by unfair competition.]
It draws attention to the dire state of the paper industry. There have been 1,000 redundancies in my constituency and 200 in Bury. The blame is put on the economic and energy policies of the Government. Will the right hon. Gentleman arrange for an early debate on this subject so that policies can be formulated to save this vital industry before it is too late?

Mr. Biffen: I cannot speedily offer the hon. Gentleman the kind of debate he requests in Government time. The question of trade is intimately affected.

Mr. Hoyle: indicated assent.

Mr. Biffen: I am glad that the hon. Gentleman confirms that. In that case, he might be able to make his speech on Wednesday.

Mr. David Winnick: Is the Leader of the House aware that it is essential that a statement should be made on the involvement of British banks in loans to the junta in Argentina, bearing in mind the unsatisfactory reply which was given a few moments ago by the Prime Minister? Is he also aware that many people in this country are undoubtedly coming to the view that to give loans to banks in Argentina that could well be used to enable Argentina to buy weapons is, in many respects, betraying the dead who fought against the aggression committed by the junta in the first place?

Mr. Biffen: I do not propose to take this opportunity to debate the matter with the hon. Gentleman. Last week we had an economic debate, a great deal of which was devoted to requesting the Chancellor of the Exchequer to be part of a collective Western initiative to secure appropriate credit terms to enable Third world economies to survive.
As to the hon. Gentleman's first request, I can say no more than I have already said to the Leader of the Opposition.

Mr. Bob Cryer: With regard to Thursday's business on the Opposition day, the Leader of the House will recall that the Secretary of State for Transport was asked for a further statement on the Serpell report following its introduction. I expect the Secretary of State to have a full answer to early-day motion 227.
[That this House condemns the decision to spend more than £500,000 on consultants to the Serpell Committee; and is especially concerned that the members of the committee had a financial interest in the consultants, contrary to rules governing the tendering for, and acceptance of, such contracts.]
The motion draws attention to the breach of the accountants' rules. Many people feel a sense of outrage about the allocation of the subcontract work for the Serpell report. Two members of the Serpell committee have been lining their pockets with massive fees, amounting to more than £½ million for consultancies in which they had a direct financial interest. The House expects a full and comprehensive explanation.

Mr. Biffen: I have every confidence that my right hon. Friend the Secretary of State for Transport will deal comprehensively with the hon. Gentleman's point. Alas, I do not have the same confidence as to his satisfaction.

Mr. James Lamond: The Leader of the House said that he would have a word with the Prime Minister about her activities in lending money to the Argentine after the 1,000 deaths in the Falklands war.
In her closing remarks last night the right hon. Lady suggested that those who were calling for talks with the Argentine were confined to Opposition Members. However, her very good friend, Ronnie Reagan, has suggested on several occasions that she should open talks with Argentine. Would the Leader of the House find out whether the Prime Minister telephoned President Reagan to ask about that?

Mr. Biffen: As my right hon. Friend the Prime Minister has not had the advantage of hearing the hon. Gentleman's remarks, I will make sure that they are passed to her.

Mr. Tom Clarke: Does the Leader of the House recall that on a number of occasions the right hon. Member for Taunton (Mr. du Cann) has urged that there should be a debate on the Civil Service? In view of the decline in morale in the service, will he arrange for a debate on this important subject?

Mr. Biffen: I am afraid that I cannot now be more forthcoming in response to the charming blandishments of the hon. Gentleman than I have been on previous occasions. It is an important topic, but there is no early prospect of Government time to debate it.

Mr. Dennis Skinner: I am pleased that the Leader of the Opposition and hon. Members on both sides of the House have joined in the call for a statement to be made on the question of loans to Argentina, especially as the Prime Minister, in an answer on 20 December, gave a guarantee on behalf of the Government that the Bank of England would underpin any defaults. That was one of the conditions required by the people who were engaged in those activities.
Will the right hon. Gentleman also bear in mind that an answer is required on the question of the Inland Revenue changes in arrangements for offsetting tax for those banks and financial institutions that are engaged in activities with countries, including Argentina, that are rescheduling their debts? If it is right for British banks to get tax offsets as a result of those loans, it is equally right for many people in this country to get tax relief, including widows who under this Government are paying tax on less than £37 a week.

Mr. Biffen: I note with interest that the hon. Gentleman feels that he has been the pioneer of the development of opposition on this topic, and that rather late in the day he has been joined by the Leader of the Opposition. I am unable to help him further than to refer him to the remarks I made to his right hon. Friend some moments ago. I shall refer the remarks and requests of the Leader of the Opposition to my right hon. Friend the Prime Minister.

Mr. Stanley Newens: Should the Prime Minister be less than anxious to rush into the House to make a statement justifying loans to the Argentine junta which allow it to buy arms from the West, what other opportunities can the right hon. Gentleman suggest are open to us to raise this matter in the near future?

Mr. Biffen: I suggest to the hon. Gentleman, who has been a Member of the House for a long time, that his tongue was truly in his cheek when he made that comment. There were opportunities last week when my right hon. and learned Friend the Chancellor of the Exchequer took part in the debate on economic affairs. It was represented in the most direct fashion that this country had an obligation, collectively with its Western partners, to ensure that credit was arranged for Third world countries that prevented the impending collapse of the trading economies of those countries, thus endangering employment in the Western world.
There are endless opportunities for the right hon. Gentleman to raise this matter and doubtless different nuances of the argument will be deployed on different occasions. No doubt that will also characterise the exchanges that involve my right hon. Friend the Prime Minister.

[The following statutory instruments and European Community documents are relevant to the debate on the fishing industry on Monday 27 January:

Specified Sea Fish (Prohibition of Fishing and Fishing Methods) (Variation) (No. 5) Order 1982 (SI 1982 No. 1845),

Sea Fish (Specified Waters of Member States) (Prohibition of Fishing) Order 1982 (SI 1982 No. 1848),

Sea Fish (Specified United Kingdom Waters) (Prohibition of Fishing) Order 1982 (SI 1982 No. 1849),

Demersal Fish (Specified Northern Waters) Licensing Order 1982 (SI 1982 No. 1850),

Specified Sea Fish (United Kingdom Fishing Boats) (Prohibition of Fishing) Order 1983 (SI 1983 No. 14), Specified Sea Fish (United Kingdom Waters) (Prohibition of Fishing) Order 1983 (SI 1983 No. 15).

(Un-numbered)
Commission's compromise proposals tabled on 26 October 1982.


Doc. No. 10372182
Fisheries Conservation: beam trawling


Doc. No. 10391/82
Community Tariff quotas for 1983

see 1st Report of European Legislation Committee, Session 1982–83, HC 34-i, paras. 2, 3 and 4 respectively


(Un-numbered)
Amendments to Commission proposals on Common Fisheries Policy


(Un-numbered)
Commission Declaration of 21 December 1982

see 6th Report of European Legislation Committee, Session 1982–83, HC 34-vi, paras. 1 and 2 respectively.]

[Debate on 31 January on Motor Insurance (Docs. Nos. 9747/80 and 5326/82)

Relevant Reports of the European Legislation Committee

23rd Report Session 1980–81—HC 32-xxiii para. 1

18th Report Session 1981–82—HC 21-xviii para. 2

7th Report Session 1982–83—HC 34-vii para. 1]

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 14 FEBRUARY

Members successful in the ballot were:

Sir Brandon Rhys Williams
Mr. T. H. H. Skeet
Mr. Ray Mawby

Mr. Speaker: We have maintained our record for impartiality.

Orders of the Day — Pig Industry Levy Bill

Order for Second Reading read.

4 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): I beg to move, That the Bill be now read a Second time.
In view of the importance of this measure, I trust that neither the House nor the Bill will be delayed too much. The House is well aware of the broad terms of the background to this modest but important measure. It has been introduced in response to the grave concern of the pig industry about the spread of Aujeszky's disease. Anxiety has been expressed in the House over a number of years. The genesis of the Bill goes back to an Adjournment debate initiated by my hon. Friend the Member for Eye (Mr. Gummer). Although my hon. Friend cannot speak on the Bill as he now holds office in the Government, I am sure that he has considerable satisfaction in that the ideas sparked off in that Adjournment debate are now reaching legislative fruition. No one has been more persistent or patient than my hon. Friend in ensuring that such a measure reaches the statute book.
The Bill's detailed provisions relate to powers to be given to the Meat and Livestock Commission to raise a levy, the proceeds of which will be used to pay compensation and other costs arising from the initiation of a control and eradication scheme in respect of Aujeszky's disease. The House knows the background to this problem. This disease is a viral infection that primarily affects pigs. Clinical signs are usually most apparent in suckling pigs and pregnant sows. Piglets almost invariably die from the infection.
Spread of the disease is mainly by the movement of infected pigs. It exists in all other European countries and most other parts of the world. It has been known to exist in Great Britain since 1953 and has been of greatest concern in areas where our pig population is concentrated. That is true of the eastern counties, part of which my hon. Friend the Member for Eye represents, and of other areas, particularly in Yorkshire. My hon. Friend the Member for Howden (Sir P. Bryan) has also been particularly active in seeking, on behalf of the industry and his constituents, measures to deal with the disease.
Over the past four or five years, pig producers have become increasingly concerned that steps should be taken to deal with the disease on what might be regarded as traditional animal health lines by means of a slaughter policy. If it is to be eliminated, it is essential that the slaughter of infected herds is followed by disinfection. Vaccination, which is practised on a wide scale in other countries, cannot be considered as an option.
The possibility of a control and eradication policy has been under discussion for some years. A major difficulty has been that under the animal health legislation my right hon. Friend the Minister of Agriculture, Fisheries and Food is bound to pay compensation for animals slaughtered for animal health purposes. Additional Government funds are not available to meet such expenditure in the case of Aujeszky's disease.
The Government have made it clear that if producers registered enough support for an eradication policy and


were prepared themselves to provide the funds for the payment of compensation, further consideration could be given to an eradication programme. To determine their attitude, a poll of producers was undertaken by the Ministry in 1981, but the results did not meet the agreed criteria for proceeding. In the meantime, we introduced, with producer support, further subordinate legislation to control the movement of pigs from herds where clinical disease had been confirmed. That legislation continues to apply.
In the light of further discussions last autumn among my right hon. Friend, the presidents of the National Farmers Unions and other producers' organisations, it was agreed that there should be a further poll of pig producers to determine whether they wished to proceed with a programme for the eradication of Aujeszky's disease, with the compensation and other costs being met by a statutory levy on pig producers. My right hon. Friend made it clear that he had no hesitation in declaring himself in favour of the proposals, which represented a real opportunity to rid the country of this troublesome disease.
In the event, the poll of 26,000 producers, owning 7½ million pigs, showed that 86 per cent. of those who replied, who own more than 5½ million pigs, were in favour of an eradication scheme with compensation being met by a levy on producers. As the owners of 75 per cent. of the total pig population are in favour of proceeding in this way, the Government have decided to make the necessary arrangements. I am grateful for the expressions of support that we have already received from both the official Opposition and other parties that, given this level of producer support, we should try to deal with the disease. That demonstrates the wide agreement among the interests concerned and the political parties that we should proceed to do so.
That, then, is the genesis of the Bill. Its specific purpose is to provide the mechanisms for funding the agreed eradication programme on a basis acceptable to those who voted for the programme. The most practial way for pig producers to finance compensation is by using that section of the Agriculture Act 1967 which enables the Meat and Livestock Commission to submit to agriculture Ministers a scheme for the imposition of charges on producers for various defined purposes. The Bill extends this power to enable the commission to raise a levy specifically to meet the costs incurred by the Minister as a consequence of exercising his powers under the Animal Health Act 1981 in relation to Aujeszky's disease and for the purpose of making payments in respect of consequential losses suffered by owners of pigs which are slaughtered.
The poll document sent to producers explained that compensation payable to owners of slaughtered herds would be a maximum of £300 for any one pig slaughtered. In addition, the producers' organisations proposed to compensate owners for the costs arising from disruption of their business on the basis of 20 per cent. of the compensation paid for the slaughter of breeding stock, weaners and fattening pigs which are part of a breeder-feeder operation on the same premises; and 5 per cent. of compensation for the slaughter of fattening pigs on separate premises, as the latter can return to full production much more quickly.
I emphasise that the Government cannot depart from the long-established rule, applied in compensation for the slaughter of animals for disease control reasons, that no consequential losses can be borne from public funds. It is significant that the industry has been prepared to take the responsibility for consequential losses.
On the other hand, I should also make it clear that it is the Government's intention to support the eradication policy fully through the veterinary service and the facilities of the agriculture Departments. The cost of Ministry staff involved, including work which the veterinary service undertakes in its professional capacity, will be borne by the Ministry of Agriculture and the other Departments responsible on the departmental Votes. That is important for the industry, because this is a partnership operation. The costs of administration, staff and the veterinary services will be borne by us out of our departmental Votes, and we hope to be able to contain that expenditure within existing provisions.
Producers will be responsible for meeting through the levy compensation costs and the relatively small additional costs arising from the employment of valuers to determine the compensation due to them, the employment of slaughterers when pigs must be killed and the costs of feeding stuffs that must be destroyed.
Although it is difficult to forecast the number of infected herds that must be tackled, the best estimate that we can make is that about 250 herds will have to be slaughtered. Most of the work would be undertaken during the first year of the campaign, subject of course to demands on veterinary manpower that may arise if there are outbreaks of other important diseases.
It is expected that the Meat and Livestock Commission levy on producers in the first year of operation would be 30p per pig slaughtered or exported live. That is expected to yield £4 million. Clearly, the levy for future years must be decided in the light of the progress made, because the first years of the scheme are likely to be the most critical. To facilitate the financial arrangements, the industry is arranging to set up a limited company that will become the body responsible for receiving the proceeds of the Meat and Livestock Commission levy for reimbursing my right hon. Friend for the costs that he will incur in compensation for slaughter, and for paying directly to farmers the consequential loss compensation that I have already mentioned. It is obvious that the proceeds of the levy will not be adequate in the initial phase of the campaign to meet the costs that arise. Therefore, the industry is making arrangements for the company to raise funds to meet the excess of expenditure over income during that period. As a safeguard, disbursements from the Meat and Livestock Commission to the company would be under ministerial direction.
I make no apology for dealing in slightly greater detail with the provisions of the Bill than one would normally do on Second Reading, because I hope that the House will facilitate the further stages of the Bill this afternoon. Therefore, I wish to anticipate, with the indulgence of the House, points that might arise later.
Clause 1 provides for the raising of the levy by the Meat and Livestock Commission, the proceeds of which will be used to reimburse the Minister of Agriculture for the compensation that he has paid to owners of slaughtered herds, and to compensate owners for consequential losses. The levy will be the subject of a scheme made by the commission and confirmed by statutory instrument. The


new levy, as distinct from existing levies raised under the Agriculture Act 1967, would be raised only from the pig sector. The cattle and sheep sectors will be unaffected. It is important that only those who will benefit directly from the eradication policy should contribute towards the measures.
Clause 1 also provides the mechanism by which the commission may transfer levy funds to any other person and by which that other person may make payments for the purposes of the levy scheme. I have already explained to the House the arrangements that the industry is making, so the reasons for this should be clear.

Mr. Keith Stainton: The reference to "any other person" relates to disruption payments. Will my right hon. Friend clarify the powers of the Ministry vis-a-vis "any other person" and the discretion available to that person?

Mr. Buchanan-Smith: As my hon. Friend realises, during the first year of the scheme, when the producers intend to set up a company to raise the necessary funds to meet the higher expenses, we must have the power to enable us to instruct other persons to do that. At the same time we must build into the scheme arrangements to ensure that no costs of compensation fall permanently on the Government. That is why we must set up a limited company capable not only of receiving and disbursing the levy funds but of raising sufficient finance in the early stages of the scheme by way of a commercial loan. We must have that power, and safeguards must be built into those powers to ensure that there is proper control and answerability.

Mr. Stainton: I am grateful to my right hon. Friend, but I am still not clear how the Minister intends to give instructions to a limited company. Does he intend to be represented on the board or will the articles of association be drawn in such a way that the company may not be eligible for registration?

Mr. Buchanan-Smith: I shall continue with the details of the Bill now, but if the House is agreeable I hope to speak again at the end of the debate, when I will be happy to answer my hon. Friend's point. The provision is somewhat unusual, so my hon. Friend is right to raise the point.

Mr. David Myles: As to the collection of the levy, I take it that the levy would be made on all fat pigs. Does it affect fat sows as well?

Mr. Buchanan-Smith: It might be helpful if I could, with the leave of the House, deal with hon. Members' detailed points at the end of the debate.
Clause 2 enables the Minister to exercise control—this may deal with some of the points raised by my hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton)—over the transfer of funds from the commission to the company. While there is no doubt that this cooperative venture, if I may call it that, has the wholehearted commitment of all involved, it is necessary to ensure that the formal arrangements for handling funds are appropriate for moneys that are raised by statutory levy. The provisions of the clause enable us to assure ourselves and to satisfy Parliament that that is so. However, I shall be happy to return to the point later in the debate to clarify any points that my hon. Friend wishes to raise.
Clause 2 also provides for the application of any surplus that may arise in ways that are beneficial to the industry that provided the funds. It is right that any surpluses that may be available—we do not know that they will be available, but I shall be delighted if they are and to know that our budgeting for the scheme may have turned out to be optimistic rather than pessimistic—should be used to benefit that part of the industry that paid the levy. I know that that matter causes anxiety to producers and the organisations, but if money is available it will he returned to the sector that provided the funds.
Clause 3 ensures that any money paid by the commission to the company from the levy receipts but not yet applied by the company to make compensation payments should be held on trust for the commission. That will ensure that, in the unlikely event that the company goes into liquidation, those moneys are available to the commission. I hope that the House will agree that, unlikely though that eventuality may be, in legislation we must anticipate every eventuality, and this extra assurance should be provided.

Mr. Nicholas Baker: I apologise for interrupting my right hon. Friend, but I must return to Committee soon. I am a little worried about how the surpluses may be applied for the benefit of the industry. It would be helpful if my right hon. Friend would tell the House at the end of the debate how that could be done. Will he also tell the House how any shortfall in the first year can be guaranteed under clause 1? I do not understand from the Bill how any shortfall can be guaranteed, and whether the Minister or someone else will do that.

Mr. Buchanan-Smith: I shall return to my hon. Friend's latter point later, because several hon. Members have been worried about that. It is impossible to be specific about surplus funds now. The levy-raising scheme is under the aegis of the Meat and Livestock Commission, which is answerable to the House for the discharge of its functions. I would not like to speculate on, nor could the Meat and Livestock Commission be tied to, the specific purposes for which surplus money should be ploughed back into the industry in two or three years' time. What matters is that surpluses, if they arise, should be ploughed back to benefit the section of the industry which the levy payers represent. To try to anticipate what circumstances might be appropriate for using surplus funds would not make sense and would be purely speculative. What is important is that the benefit goes back to those who have paid the levy.

Mr. Edynfed Hudson Davies: It may be helpful to the Minister if we raise the question not of what the surpluses may be but of the mechanism he will devise to see that the levy is evened out as the position in regard to the disease improves so that there will not be a surplus accruing in the fund. This is something that he can foresee. Presumably he can deal with this at the beginning of the debate rather than at the end.

Mr. Buchanan-Smith: I have already dealt with that; the hon. Member may have missed it. I said that we expected the levy to be 30p per pig for the first year of the scheme, although I said that I could not anticipate what it would be in later years. We are dealing with a disease and until we get the scheme into operation, no one can say exactly how many herds will be affected or how many pigs


will have to be slaughtered. Under the Bill there will be a facility to vary the levy in later years in accordance with the degree of expenditure that may prove necessary.
To take an example, I remember when swine fever was debated in the House. An eradication scheme was resisted by successive Governments because of the high cost that would be involved. When a scheme was introduced, the best expectations of everyone about the time it would take to eradicate the disease were exceeded. The most optimistic expectations were realised.
Perhaps we might be optimistic now. We may not be justified in being optimistic. One cannot tell. It would be sheer speculation if one tried to predict what will happen in the later years of the scheme. With the commitment to be made in the early years I hope that we shall achieve enough to make sure that proper and effective eradication is achieved in the shorter rather than in the longer term.
Clause 4 details those parts of the Agriculture Act 1967 concerning the Meat and Livestock Commission which will or will not apply to it in this role. Clause 5 simply contains the usual interpretation, and so on.
I apologise for having tried to deal with the Bill in a relatively short speech but, on the other hand, its purposes are relatively straightforward. They are accepted by the industry although there is concern on detailed points, which has been voiced in the interventions. At the same time I hope that I have anticipated to some extent some questions that may be raised in the debate. We see the Bill performing an essential function in a unique arrangement for dealing with an animal health problem.
My right hon. Friend has made it clear that he believes this is the right time to act to rid Great Britain of an increasingly troublesome pig disease. If we manage to get the Bill speedily on to the statute book we intend to make a start on eradication as soon as we reasonably can, subject only to any physical problems of getting the scheme into operation. If the House will speed the passage of the Bill we shall do our best after it becomes law.
Notwithstanding any differences of detail, the measures that we propose conform entirely with the animal health traditions that we have always followed and that have served us so well for more than a century. This is another milestone in the programme of disease eradication, of which we can be justifiably proud. Other countries are envious of our record. In that spirit and anticipating the cooperation of the House I commend the Bill to hon. Members.

Mr. Mark Hughes: I endorse the desire of Opposition Members to give the Bill a speedy passage. The sooner it is on the statute book and the scheme is in existence the better. I hope I will not sound presumptuous if I quote from the report of the European assembly of 10 May 1979 when that body debated a report curiously called:
Motion for resolution tabled by Mr. Hughes on the urgent need for eradication measures to control nervous diseases in pigs".
What I said then was:
These two diseases, enzootic bovine leukosis and Aujeszky's disease, are showing a disturbing increase throughout the Community and there are areas where Community action supplemented by effective national action can be most effective. Therefore the plea contained in these documents, that we do not

pretend that these diseases will go away, but that we recognise the need for a much more active policy, is a very real one, and I regret deeply that one of the last actions of recent Labour Government in the United Kingdom was to refuse to embark upon an eradication scheme for Aujeszky's disease in the United Kingdom. But whether or not any of these are zoonotic and can affect man is beside the point. The damage they do to some of the highest quality breeding stock of cattle and of pigs throughout the Community is very serious indeed, and it is in this veterinary sense that the Community will make progress.
I retract not one word either of the criticism of my colleagues in the Labour Government or of what I said nearly four years ago in the European assembly. Following the decision of the outgoing Labour Government, on 24 June 1980, the present Government indicated clearly an alternative course for dealing with Aujeszky's disease. I quote from the press statement:
The alternative course, which we favour, is that owners of herds at risk from the disease should be encouraged to take more stringent measures of prevention control, including the use of vaccine. We should give immediate attention to applications, under the medicines act procedures, for the licensing of the inactivated Aujeszky's disease vaccines for use in this country. Properly applied, these vaccines should give substantial protection from the disease and, in an infected herd, should reduce the weight of virus and prevent loss. To delay the licensing of a suitable vaccine while it is subjected to a field trial in this country—as has been suggested—would in our view serve little purpose.
Regrettably, no Government can be proud of their policy towards that disease in British pig herds. The Bill will put that right. Because the number of cases of the disease fell sharply during much of 1980 and 1981 the Government and the pig industry felt at ease. In the first half of 1980 there were 14 outbreaks and in the second half of 1980, eight outbreaks. In the first half of 1981 there were five outbreaks and the same number in the second half of that year. However, in the first half of 1982 there were 25 outbreaks.
It is sad that we have only embarked on this eradication scheme after too many producers have suffered from too much loss. There can be no doubt that it was in the Government's power to eradicate the disease with significantly less loss to the national pig economy than will result from this scheme. Whether the money comes from the Exchequer or the industry is almost immaterial. The disease could have been eradicated with a slaughter policy some years ago at less cost to the pig farming community. That is my sorrow, and I make no party political point about it because, as I have said, I held the same view when the Labour party were in government. We should have gone for a Government-funded eradication scheme then, before the spread of the disease. We failed. Both the Conservative and Labour Governments embarked upon a policy which, regrettably, has not succeeded.
In the middle of last year there was a new poll to see whether the producers would go for the necessary agreement. It would be remiss not to follow the statistical line of the Secretary of State for Employment. In a press notice of 20 October 1981 the Minister of Agriculture, Fisheries and Food states clearly that the earlier poll
confirms that the response itself, and the number of producers in favour of a scheme, were well below the figure of 75 per cent. which was the agreed criteria for acceptance.
Let us analyse the statistics of the agreement upon which the Bill is based on the same terms that the Secretary of State for Employment analyses the agreement with the General, Municipal, Boilermakers and Allied Trades' Union. On this occasion 42·3 per cent. of producers voted, or, to use their phrase, completed and returned the


questionnaire. They owned 85·8 per cent. of the total pig population. By some curious machinery, if one owns a pig one is held to have the right to vote for its eradication. Therefore, 74·3 per cent. of 85·8 per cent. of the pig owners voted in favour of an eradication scheme. I find it difficult to see how that meets the criteria for rejecting the poll in 1979–80 of 75 per cent. It is not even 66⅓ per cent., but so be it.

Mr. Hudson Davies: The hon. Gentleman seems to suggest that the ownership of pigs is almost irrelevant. Surely the implication of what the hon. Gentleman is saying is that even if a farmer has no pigs at all, his opinion could have weight. If the main pig producers felt strongly about this, it must make sense in terms of approval of the scheme. In fairness to the Government, that must be so.

Mr. Hughes: I am not saying that at all. I am saying that if in October 1981 the poll was rejected because the figure was well below that of 75 per cent., which was the agreed criterion for acceptance, under no circumstances can 74·3 per cent. of 85 per cent. of pigs be counted as 75 per cent. of anything. One thing cannot be said about the water workers' dispute and a completely different thing about this poll. I fully accept that there is an overwhelming desire on the part of pig producers to accept the scheme. That has been clearly expressed. However, a low poll in one area cannot be acceptable while a low poll in another is unacceptable. One may not care for it but that is the choice.
As I said, I shall not seek to delay the passage of the Bill in any way. However, will the Minister look closely at clause 1 subsections (5) and (7)(b)? Subsection (5) states:
the proceeds of any levy imposed under a pig industry levy scheme … shall be applied solely in making payments for the levy purposes.
What is the position of hounds in hunt packs who have been supplied with diseased meat and have had to be slaughtered? Will there be compensation for the consequential loss to the owners of those hounds from the levy? I make no bones about it; I am not in the business of hunt hounds compensation. However, if I bought some infected meat in good faith for my boxer dogs and they had to be destroyed I should want to know whether I was covered under the levy.
Secondly, clause 1(6) says:
The Commission may make arrangements for payments to be made for the levy purposes by any other person and may for that purpose pay sums collected by them in pursuance of any such scheme to the person for the time being responsible in accordance with any such arrangements for making payments for the levy purposes.
I am extremely unintelligent, and if that means anything to the hon. Gentleman I shall be grateful if he will elucidate it for my benefit, if not for the benefit of others. In my opinion, it is a fairly meaningless and long sentence.
The following subsection refers to
expenses incurred by the person so responsible".
What expenses are to be permitted under this scheme?
My final query concerns Northern Ireland. Will the Minister elucidate the situation there? Clause 5(5) says that section 4(4)
extends to Northern Ireland in so far as it applies in relation to returns or information".
Am I right in assuming that it does not? I accept that there has not been an outbreak of Aujeszky's disease in Ulster so far, to my knowledge, but what is the long-term position there?
We welcome the Bill and wish it high-speed progress to the statute book. The sooner that this eradication scheme is in effective operation the better. I regret, however, that we wasted five years when my party was in power and four years under this Government.

Sir Peter Mills: I shall not follow the hon. Member for Durham (Mr. Hughes) in what he said, except to say that we should be grateful that a start has now been made. That is what is important. I think that there were reasons for the delay in the past. It is not for me to defend the Socialist Government, but there were reasons. There was perhaps also delay by my hon. Friends, because of course the agreement of the industry had to be obtained, and there was some division there.
I welcome the Bill. It is a real step forward in dealing with this distressing disease in pigs. In the past the disease has taken a steady toll of producers' profits and of course it undermined their confidence. Those are two important factors. In producing food for the nation there has to be confidence in the farmers and there have to be profits. Without profit, one will not get the food. It is as well for Opposition Members and people outside to realise that farmers are in business to make a profit, and they must have confidence. In my opinion, this Bill will ensure that. Anything that can be done to maintain that confidence and eradicate the disease must be right.
At present profits are rather low in the pig world. An outbreak of this disease lays low the pigs, and it is distressing for any fanner who has a serious disease affecting his herd, flock or pig unit. That is why I sincerely welcome this Bill, and I am grateful to the Minister for what he said.
I want the pig industry to flourish. I want the pig industry to produce more pigs and healthy pigs, so that we may have a larger share of the home market. At present the production is almost 100 per cent. pork pigs. On the bacon side it is an entirely different matter. I want United Kingdom farmers to have a larger share of the home market in bacon. I believe that the Bill will help in that way by giving confidence in better profitability. I am not satisfied that the Danes have such a large share of our home bacon market. Measures should be taken to change that, and this is one measure that will go some way to help in intensive production areas such as Yorkshire.
We have made great progress in this country in the eradication of disease. During my long time in agriculture I look back on the eradication of tuberculosis, brucellosis, and foot and mouth, which is certainly well contained. The consumer should be grateful to a nation and a Ministry of Agriculture, its official and vets, who have contributed so much to the eradication of these terrible scourges. We are ahead of many other European countries. It is strange that again the United Kingdom is taking the lead in Europe in the eradication of disease. I pay tribute to the Ministry and to our vets. This is another disease which I hope will be elminated by this eradication scheme.
I do not want to delay the passage of the Bill. The quicker we can get it through, the sooner we can get the scheme under way. To that end we should make our speeches short. However, I want to ask one or two questions. First, the NFU is concerned about the full cooperation of the slaughterhouse sector in the handling of


the pigs. I am connected with a slaughterhouse, and in my view it should be made clear that pigs once slaughtered cannot do any harm or in any way damage the consumer.

Mr. Mark Hughes: rose—

Sir Peter Mills: I shall give way in a moment. Perhaps the veterinary section of the Ministry will send out circulars to make it quite clear that those pigs are perfectly suitable for human consumption. That is an important point.

Mr. Hughes: I thank the hon. Gentlemen for giving way. There are sporadic pieces of evidence that this is a human zoonosis. Will he make it clear that that zoonotic condition is of the live animal, not of the carcase? From what little evidence there is, it is clear that zoonosis comes from handling the live animal, not from handling or eating the meat.

Sir Peter Mills: With respect, the hon. Gentleman is making my point. I simply want the Ministry to make the position quite clear to slaughterhouses, and reassure consumers that there can be no problem with the pigs that have been slaughtered under the scheme.
Perhaps the Minister, with his great knowledge, will say how long it will take to eradicate this disease. Clearly, if slaughterhouse policy comes into force quickly, as in the case of foot and mouth, it will soon deal with this troublesome disease.
My final question is: how long will it be before a farmer can restock after cleansing and disinfection have taken place? It will be useful to have that information and it will give the farmer more confidence.
I welcome the Bill. It is another step forward in the eradication of diseases of our animals. We lead the world in this.

Mr. Geraint Howells: Hon. Members on both sides of the House welcome the Bill, which seeks to eradicate, if possible, this disease which troubles the pig industry. I endorse the sentiments expressed by the hon. Member for Durham (Mr. Hughes) when he said that successive Governments have not looked after the interests of the pig industry in previous years as they should have done.
Those in agriculture are in favour of eradicating the disease but are worried about the principle of funding. Many members of the farming fraternity are worried that, once the principle of paying to eradicate the disease through the levy system is accepted, in future other sectors of the industry will have to accept a levy system to eradicate other diseases.
Hon. Members receive briefs from various organisations involved in agriculture. The National Farmers Union welcomes the introduction of the Pig Industry Levy Bill 1983 which is designed to raise the levy from pig producers to pay for the slaughter and compensation scheme for Aujeszky's disease. It follows a producer poll held in November 1982 in which over 85 per cent. of producers said they were in favour of a self-funded eradication scheme for the disease.
I have received a brief from the Farmers Union of Wales. From the outset, the FUW has opposed the principle of an industry-financed eradication scheme for

the disease. It fears that it may set a precedent for the future control of other diseases. The FUW is sympathetic to the need for such a scheme, but it believes that the scheme should be run and financed by the Government. Why do the pig producers have to accept the levy system? Why are the Government not willing to pay from central funds?
The poll of producers was held to assess the degree of support for the proposed scheme. According to the FUW, it was left to the discretion of pig producer members to decide whether they wished to back the scheme. The FUW said:
It is interesting to note however that only 42·3 per cent. of British producers completed and returned the questionnaire.
It is the FUW's opinion that the Minister took account of the percentage of pigs owned by those producers and that that swung the Bill in favour of the scheme. Is that right or wrong? The document continues:
The FUW has always supported the principle of one-man-one-vote and we were therefore opposed to the method of calculating support for the scheme. Because of the relatively low number of pig numbers in Wales today, it is very doubtful even if all producers in Wales had used this pig vote to oppose the scheme whether the outcome could have been reversed.

Mr. Stainton: What about proportional representation for pigs?

Mr. Howells: It will be best if I do not comment. The final paragraph of the brief that I received from the FUW is relevant. It states:
British pig producers are currently going through a difficult period financially and the outlook for the foreseeable future is grim particularly as the threat of negative MCAs looms on the horizon which will act as an incentive to imports. Imposing a further levy on the industry at the present time will merely aggravate the situation further.
I am delighted that the Government have taken a step in the right direction and hope that the pig industry will be much healthier and financially better off in the years to come.

Sir Paul Bryan: I declare my interest as the Member of Parliament representing an area containing many pig producers. The pig population is not just higher in the east riding of Yorkshire than in any other region of Great Britain, but we have some of the most progressive and go-ahead pig producers in the country. Having declared my interest, I declare also my pride in my constituents who have had so much to do with the birth of this Bill.
At about this time last year there were a number of outbreaks of Aujeszky's disease in the east riding. Instead of self-pity or appeals to the Government, the pig producers, under the chairmanship of James Dewhirst, set up the east riding Aujeszky eradication committee. The committee was composed not just of pig producers, but of vets, feed merchants and so on and it raised about £20,000 or £30,000 to conduct a campaign in favour of eradication. The campaign was promoted and conducted with great professionalism. A poll was taken of Yorkshire pig producers which showed overwhelming support for an eradication scheme.
I suggest that the evidence produced by the committee greatly strengthened the Minister's hand in his decision to impose a second national poll on the industry. I congratulate the Minister on the leadership that he showed when the national poll was announced by giving his strong support.
I want to press the point that has been made consistently to me by pig producers, that speed is now all-important. Will the Minister give us some idea of the timetable for the Bill and exactly what form it will take? The speed with which the Bill has been brought before the House and the speed with which we are getting it through the House shows that we are all aware of the urgent need for the measures. The Bill is a milestone in the industry's successful progress. I wish it well.

Mr. Edynfed Hudson Davies: I declare the minor interest of someone who tries to maintain the old Welsh tradition of keeping one, sometimes two, and once three pigs in a year. That hardly puts me in the producer category. As a number of hon. Members have said, this Bill seems to be a case of some praise and some blame. The Government have come out of it well in the end.
I feel that the criterion that has been used by this and previous Governments of confining the aid that they give for the eradication of disease to those diseases that have a direct human impact is unsatisfactory. It is unfortunate if that is the position that we have to face. The Government's further initiative is proper. Members of the alliance would not wish to oppose the Bill.
It seems strange that the Government should be so reluctant to ameliorate an act of God. The disease falls where it may, so it would be proper for the Government to compensate those whose stocks have been afflicted. The question whether it has human impact is secondary. It causes enormous losses to a sector of our economy and our way of life—the production of foodstuffs. It is an unhappy distinction to draw. It is rather like providing a tremendous ambulance service as a last resort measure to clean up a bad accident when the stretch of road where it happened should have been straightened to prevent such an accident.
I have been given figures by the National Farmers Union, and I understand that £7 million would be sufficient to eradicate the disease. It is a paltry sum. It is wrong that we should have to look for contributions from the industry to eradicate disease in our food stock when such a relatively small figure is involved. However, the Government are not willing to step in and, under those circumstances, the Bill fits the needs of the industry.
The hon. Member for Durham (Mr. Hughes) and one or two other hon. Members felt unhappy about the poll last year. Yet it was an outcome which reflected the feelings within the industry. It had a response of 42 per cent. I speak as a member of a party that is obsessed with proportional representation! Forty two per cent. is not a bad figure. Of that 42 per cent., 85 per cent. were in favour of the levy. I do not wish to find myself in the same difficulty with figures as did the hon. Member for Durham. The poll was really concerned with whether people objected to the levy, rather than with whether they were in favour of it. On such an appraisal, if only 15 per cent. of the 42 per cent. were not in favour, overall about 66 per cent. of the industry did not object to it. Knowing farmers as I do—I am married to one—if they do not object they are obviously in favour. By and large, farmers are willing to stand up front to object to anything that they do not find acceptable.
The Minister can take some comfort from the fact that the industry is behind him. The British farmer, as exemplified by the British pig producer, is a responsible person. Where Governments fail in their duty, the British

farmer is usually willing to step in to help. It is in everyone's interests that disease should be eradicated from our food stocks. The producer has stepped in, but the least that we can do is give some credit to the Government for at least facilitating the self-help scheme. The alliance parties support the Bill.

Mr. Keith Stainton: My constituency is in Suffolk, and the Suffolk county National Farmers Union claims—I believe correctly—that Suffolk is the second largest county for pig production in England. Therefore, while declaring that interest, I feel that it also entitles me to make a number of comments both on the background to the Bill and on the Bill itself.
I first raised this disease five or six years ago with successive Ministers, so it did not surprise me that, at a recent meeting of the Suffolk NFU, when the county secretary read the annual report and made reference to the poll and the forthcoming Bill, voices from the hall shouted, "It should have been years ago".
I fully endorse the remarks of my hon. Friend the Member for Devon, West (Sir P. Mills) about the confidence that the measure will bring to farming. Against that background, and the need to cease arguing and be decisive, it is superfluous and almost irrelevant to pursue a discussion on the poll issue in esoteric percentage terms, or even further to discuss the levy principle.
It has been said that £7 million would not be an enormous burden on the Exchequer; but equally that amount spread throughout the industry over two, three or four years is quite digestible. I know of the distress among a number of my farming friends in Suffolk who have suffered heavy and recurring losses for several years. I hope that provision will be made for the remaining herds that are sub-clinically infected and have yet to be slaughtered. No doubt that point will be considered in Committee when discussing the powers that the Minister is seeking for instructing the Meat and Livestock Commission. Otherwise, further hardship will doubtless ensue.
Aujeszky's disease is referred to positively in clause 1, yet there is no definition of the disease itself. There may be a definition somewhere, as in 1979 it became a notifiable disease. I wonder whether it can be diagnosed with clinical certainty so that there is no obfuscation of its meaning.
When the Committee considers the Bill, it will be concerned with the actual mechanics of collection and disbursement. I intervened earlier, when the Minister kindly gave way, to draw attention to the phrase "any other person" in clause 1(6). I trust that that point will be pursued in Committee, together with a number of others that hang thereon.
Clause 2(3) deals with surplus, and provides that any surplus that might accrue during the lifetime of this scheme shall be for disbursement to the pig industry or the pig products industry. It is convenient that those two elements of the pig industry are defined in clause 1(8). I wonder, however, whether those definitions are not too wide, and should be more closely drawn. The Committee should give attention to the point, perhaps within the sectors that will have been specifically affected by the levy.
I wonder how the ratios of up to £300 per animal and the 20 per cent. for breeding and 5 per cent. for the


fattening pigs, with regard to disruption costs, have been arrived at, and what their validity is. Admittedly, the £300 is a miximum and it is therefore a dangerous and difficult basis from which to try to extrapolate the 20 per cent. and 5 per cent. in terms of the average herd. Further comments on that point could be of great financial import to pig producers.
A number of points do not appear in the Bill, but are closely connected with it, and some of them have been touched upon by my hon. Friend the Member for Devon, West. One is cleansing and disinfection. I should like to think that enough is known about the proper procedures here, because we are pursuing the path of eradication. I should hope that adequate research has been conducted on this, but I am disturbed by the comments of my farming colleague, my hon. Friend the Member for Devon, West who asked for guidance as to the time lapse between slaughter and reoccupation of the premises. That observation alone, coming from the source that it did, causes me to press the question about knowledge of the thoroughness and effectiveness of the cleansing and disinfection operation.
My hon. Friend the Member for Devon, West also mentioned the sale of meat. The public has been horrified by recent accounts of how condemned meat—meat not recognised as fit for human consumption—has been switched by a variety of "cowboy" operations and found its way into food chains, some of them of high repute. It is in this context that I feel that it is correct to stress the human health risk, or otherwise, with regard to the slaughtering of Aujeszky's affected pigs.
The National Farmers Union, in the circular that it distributed to all hon. Members, made the point:
as the disease is not considered to represent a human health risk, sub-clinically infected pigs or non-infected pigs from infected herds may be slaughtered as usual in abattoirs and enter the human food chain.
If one interprets this correctly, presumably those pigs that are wholly infected, whether dead or alive, could on the wording ostensibly represent a human health risk if they came into the human food chain. We need the utmost clarification on this point, and about the marking or the dyeing of any dangerous meat by the usual slaughterhouse inspectorate. Should there be the slightest possible doubt, I return to the confidence point made by my hon. Friend the Member for Devon, West.
I join those who pleaded with the Minister to give some idea, if he possibly can, of the time scale that might be envisaged. I readily take his point that we might meet the most optimistic targets and come out of this problem very quickly. On the other hand, that may not be so. However, I should like to know the Minister's thinking on this matter.
I raise this point because it has relevance to the ultimate commercial insurance of this disease risk by pig producers. It would give some guidance to the House and therefore to the possible underwriters, who could then apply their minds to the variable circumstances that the farmer will be facing two, three or five years hence.
I welcome the presentation of the Bill. We all wish it a fair wind and a speedy passage.

Mr. John Townend: As one who has been pressing the Government for some time on the vital

need to take action to eradicate Aujeszky's disease before it became endemic, as it has in Holland, I welcome the Bill and congratulate the Government on the speed with which they have acted since the poll.
The Bridlington constituency, which I have the honour to represent, and which includes the large agricultural area of Holderness, has a unique claim to fame in that it is the only constituency that has more pigs than people. With the area represented by my hon. Friend the Member for Howden (Sir P. Bryan), the east riding is the largest intensive pig-producing area in the country. What is probably more important is that we have not only the leading United Kingdom breeders but some of the leading breeders in the world. Hon. Members will appreciate how important the industry is not only to agriculture but for employment in an area with high unemployment.
The problem of the disease was first raised with me after I had been in the House only a couple of months, in June 1979, when the vets and pig farmers in the east riding started to campaign for a slaughter policy. My hon. Friends the Members for Howden and for Eye (Mr. Gummer) joined me in making representations to the Minister and there was an Adjournment debate initiated by the hon. Member for Eye in that year.
In October 1980, after the Government had unfortunately made it clear that they could not provide Government finance for a slaughter policy, a poll was held. There was dismay in our area at the result of the poll, particularly as 67 per cent. of those owning pigs had voted in favour. However, what vets and pig farmers forecast occurred, and the number of outbreaks of the disease started to rise dramatically. In the first six months of 1982 there were 25 outbreaks, of which no fewer than 11 were on Humberside. That increased the feeling that some urgent action should be taken.
The pressure for action led to the formation, as the hon. Member for Howden has already mentioned, of the east riding Aujeszky eradication group, which showed great initiative in holding its own poll. It persuaded farmers in the area to contribute £5 to £10 to the eradication scheme. I should like to congratulate it, because without its efforts there would not have been the pressure on the NFU and the Ministry to hold a further poll. The second poll resulted in clear support for a slaughter policy.
The Ministry has always let it be known that the cost of administration would be borne by the Government. Farmers have stated that they would like the Minister to confirm that veterinary fees will be included. My right hon. Friend mentioned this issue in his opening remarks. I am afraid, however, that parliamentary draftsmen do not make the situation as clear as one might hope. I have read carefully clause 2 of the Bill. I should like my right hon. Friend to point out the part of the clause that states that the Government will accept this expenditure.
It has been mentioned that the industry is going through a difficult time. Profitability is very low. Indeed, some farmers are not making a profit. The introduction of the scheme will lift at least one worry from the shoulders of a hard-pressed industry. It is an efficient industry that has made a major contribution to the success of agriculture in this country. It is with great pleasure that I support the Bill.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): With the leave of the house, I should like to reply to this useful


debate. I am most grateful for the support given to the measure on both sides of the House. My hon. Friend the Member for Bridlington (Mr. Townend) has spoken on consecutive days about fishing and about pigs. To have had his support on those two days has been a pleasurable experience. I hope that it will be repeated on many occasions in the future. I trust that both the fishermen and the pig farmers whose interests my hon. Friend represents so strongly will be satisfied with the efforts made by the Government.
I wish to deal with one major question that is more a matter of policy than of detail. I thank the hon. Member for Durham (Mr. Hughes) for his welcome and promise of help in respect of the Bill. I appreciate the hon. Gentleman's personal understanding of the disease and his interest in it over a number of years. This adds considerable weight to his remarks. It is true, I think, viewed with hindsight, that of all the diseases that we have tried to eradicate in this country there would have been less expense if action had been taken earlier.
Like the hon. Member for Durham, I have been impatient to see action taken to eradicate a number of diseases—brucellosis in cattle is one of them—where, if action had been taken earlier, the programme could have been completed more cheaply. It is often only with hindsight that we can appreciate the full character of a disease and its implications. It is possible to speculate about the outcome if earlier action had been taken.
However, the Government are the custodian of the nation's purse. We are dealing with taxpayers' money. The Government have to draw up priorities for the eradication of disease. It is important to bear in mind that such priorities are drawn up not only with financial implications in mind but also according to the best advice available from the veterinary profession. One sometimes finds a variety of views among members of the veterinary profession about the prevalence and virulence of a disease and whether it is easy or difficult to control. It is ultimately a political judgment to be made by Ministers in the light of the knowledge at the time and the resources available.
I have been asked why the Government have not dealt with this disease, as has happened in other instances, by taking total responsibility. The simple answer—I accept that it is not the whole answer—is that this disease cannot be considered as a threat in the same category as foot and mouth disease. It is perhaps, in some respects, not so serious as brucellosis, which has serious human health implications. I wish to underline that there is not the same human health implication. It is at two removes. I would hate any feeling to emerge from the debate that this disease could be a problem for consumers of pigmeat or pig products.
The Government do not regard the Bill as a precedent for further eradication proposals. The voluntary cooperation of the industry in financing the scheme itself means that the eradication of this disease has been accorded a higher priority than would otherwise have been the case. The problem is that if the Government undertook an eradication programme, they are bound, under animal diseases legislation and especially the Animal Health Act 1981, to pay compensation. The moment that the Government embark upon eradication they are bound to pay compensation. The Government have not felt able to give priority to this disease. However, the direct interest taken by the industry has triggered the Bill.
A large number of points, some highly technical, have been raised. I hope that the House will be patient if I fail to deal with some of them. I hope that hon. Members will draw my attention afterwards to such points and I shall be happy to deal with them by correspondence or in discussion.
The hon. Member for Durham asked what expenses were committed under clause 1(7). All expenses incurred directly in the administration of the funds, including interest on the loan, are to be raised by the company. The hon. Gentleman also referred to Northern Ireland. This is a completely separate entity in animal health terms. It is the responsibility of my right hon. Friend the Secretary of State for Northern Ireland. My right hon. Friend has no intention of changing the policy at present but is watching to see what happens as a result of action taken here. Policy in Northern Ireland in respect of Aujeszky's disease is different. The disease does not exist there on the same scale. The measures taken to deal with it are different.
My hon. Friend the Member for Devon, West (Sir P. Mills) and others asked how long we would take to eradicate the disease. That is a matter of speculation because no one can tell. I am prompted to say, "Almost as long as a piece of string." It depends on so many factors because very often, when one starts a disease eradication policy, one finds, sadly, that some pockets or areas of it have for one reason or another been masked. I do not use that word in a derogatory sense but things are found that were not known about when the policy commenced. But if one can express a hope—as the House knows, I am always supremely optimistic—it is that within four to five years we will be able to see the back of this problem broken. I have watched disease eradication programmes in the past. I have seen some go better than expected and some go worse, but if we have the total co-operation of the industry, and with the resources that are to be devoted to the policy, we can deal with it properly and well.
My hon. Friends the Members for Devon, West, and for Sudbury and Woodbridge (Mr. Stainton) asked how long someone will be out of business before he can restock. I understand that it is about four weeks after slaughter or two weeks after the completion of disinfection, whichever period is the longer. That is the general rule which will apply for restocking.
My hon. Friends the Members for Howden (Sir P. Bryan), and Bridlington raised the point, which I attempted to answer, although obviously inadequately, when I opened the debate, about the timetable for the introduction of this scheme. I can only repeat what I said earlier in the debate, that, subject to the progress on the legislative stages of the hope they will be swift—we would hope to introduce this scheme as quickly as possible after it goes on to the statute book. I cannot say more than that at this stage because it involves the mobilisation of the veterinary resources, which are directly the responsibility of my Department, the drawing up of the details of the levy scheme with the Meat and Livestock Commission, and the arrangement for setting up the company in order to raise the funds in the early stages to repay the expenses of Government in operating the scheme.
I cannot give a precise date but I can give the assurance that the only limitations on the timetable will be the physical limitations of being able to set the arrangements


in motion. I hope that, in the spirit of wanting to get the scheme into operation quickly, the House and my two hon. Friends who raised the matter will accept that reply.
My hon. Friend the Member for Sudbury and Woodbridge raised a number of fairly technical points. If I do not answer all of them I will be happy to return to them in correspondence later. In an intervention, he asked me about clarifying the powers of the Minister in relation to "any other person". One has to look back to the basis of the need for this power which enables the Minister to issue directions to the Meat and Livestock Commission. In those circumstances, it is clear that there have to be financial agreements between the Minister and the company which is to be set up and also between the Meat and Livestock Commission and the company. These agreements will have to contain provisions which are designed to ensure adequate control over the handling of the funds. It is in that respect—this is basically in order to ensure that we had that control, where the raising of the funds and their administration are at one remove from Ministers—that that control and answerability are properly maintained.
My hon. Friend also asked how the funds will be guaranteed to the Minister before the levy money becomes sufficient. The terms of the agreement between the company and the Minister will commit the company to ensure that adequate finance is available on demand to meet the Minister's costs. The actual disbursements of the costs fall to the agriculture Departments. The company will be raising a loan to meet this purpose.
My hon. Friend also asked how the figures of ratios for compensation of consequential loss were reached. They were decided on by the industry itself and were included in the poll document which went out. The National Farmers Union company will be responsible for making these payments.
My hon. Friend also asked about the diagnosis of Aujeszky's disease. The evidence of the presence either now or earlier of Aujeszky's disease can in veterinary terms be properly established. There should be no particular difficulty among those who will have to administer this.
My hon. Friend also mentioned sub-clinically affected herds. Provisions for this will be part of the eradication scheme. Experience of other schemes is that this is a factor. I hope that we will be able to deal with this in drawing up the scheme.
My hon. Friend the Member for Banff (Mr. Myles) also asked on what the levy would be raised. It is on all fat pigs for slaughter and on all pigs exported live. That includes fat sows as well as clean pigs.
There are two other points which I should have liked to mention in detail in my opening remarks about the relevance of such schemes under our European Community responsibilities. In one sense, the levy which will be operated under the scheme is a state aid under the treaty of Rome. But, judging from the experience of similar schemes in this and other countries, we do not expect any difficulty in the operation of the scheme.
Again, on some of the wider aspects, there is obviously concern that if we go for a policy of eradication—as we have on foot and mouth, where thankfully we have managed to extend our arrangements for a further 12 months pending the working out of satisfactory arrangements in Europe—we should be resisting health controls on imports. The status that we hope to build up under Aujeszky's disease should be able to be protected under those arrangements.
I hope that I have dealt with most of the points raised. As I said a moment ago, I hope that hon. Members will get in touch with me over the points I have not dealt with. I have no desire to miss anything, because the purpose of all of us is the same.
I shall not enter into the argument of "one pig, one vote" or "one vote, one pig, one man" which the hon. Member for Cardigan (Mr. Howells) raised. I hope that the Farmers Union of Wales, if it wishes to continue that argument, will do so with the hon. Gentleman rather than me. It is clear that the great weight of opinion in the industry is behind the Bill. Equally, I accept that some producers in the industry will be bitterly opposed to it. They have perfectly fair and legitimate reasons—I do not criticise them—but I ask those who are opposed to the scheme, those who did not vote for it in the poll, to realise, as the weight of opinion in the House this afternoon demonstrates, that if we proceed successfully with the scheme, as I hope we will, it will benefit the industry as a whole. Even those who did not vote for it will in the end derive advantage from it.
Last, but by no means least, I thank not only those Members who have spoken in support of the Bill this afternoon but also those who have been involved outside—the group to which my hon. Friend the Member for Howden referred, those in the National Farmers Union, and those on the Meat and Livestock Commission who have willingly undertaken this responsibility in the best interests of the meat industry. I hope that the co-operation we have had so far will continue on eradication and that in not too many years the disease, far from being a problem, will simply be a memory.

Mr. Mark Hughes: It will not be the Opposition's wish to debate the Bill in Committee or to delay its Third Reading. I trust that we shall be able to deal in correspondence with the technical problems of carrier pigs which show no clinical signs but which may pass on disease. We wish the Bill a speedy passage. The sooner the scheme is in existence for the benefit of pig producers the better.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Cope.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Divorce Jurisdiction, Court Fees and Legal Aid (Scotland) Bill

As amended (in the Standing Committee), considered.

Clause 3

POWER OF SECRETARY OF STATE TO MAKE PROVISION ABOUT FEES ETC. IN RELATION TO LEGAL AID

The Solicitor-General for Scotland (Mr. Peter Fraser): I beg to move amendment No. 2, in page 2, line 24, leave out '(1)'.

Mr. Deputy Speaker (Mr. Paul Dean): With this it will be convenient to take Government amendments Nos. 4, 6, 7, 8, 9 and 10.

The Solicitor-General for Scotland: The effect of the amendment and the other amendments with which it is coupled is to replace section 14A(2), which made a general provision disapplying all powers of the courts to make provision in respect of fees and outlays, with more precise provisions in schedule 1 disapplying certain specific powers of the courts. The amendments make clearer the dividing line between the responsibility of the Secretary of State and the courts.

Amendment agreed to.

Mr. Donald Dewar: I beg to move amendment No. 3, in page 3, line 12, at end insert
'but in making any such regulations the Secretary of State shall have regard to the primary duty to provide adequate and comprehensive legal representation in the civil and criminal courts at all levels'.
I have no wish to delay the House with a lengthy rerun of the debate that took place in Committee. However, it is right that the House should hesitate for a minute or two while I explain once again to the Minister a concept that I hope he will always bear in mind. There is still a great deal of anxiety among my colleagues and among many others who are not connected with the legal profession but who are interested in proper legal representation in the courts. They are anxious that the regulations that may be made under clause 3 when the Secretary of State takes responsibility, as he intends to do, for legal aid shall have an overriding interest in the
primary duty to provide adequate and comprehensive legal representation in the civil and criminal courts at all levels.
One would hope that that would be so self-evident that it would not be necessary to press the Solicitor-General for Scotland on the point. However, as we know from the various debates that we had in Committee, there is a great deal of panic in official breasts about the cost of legal aid. We are told constantly about the need to struggle for greater value for money. To adopt a phrase that has been used in English circumstances, there is a fear that legal aid costs are now cascading—this was the phrase used by the Lord Chancellor—out of control.
I do not wish to go through the figures at great length. I accept that in 1978–79 the total legal aid bill in Scotland was £6·5 million. By 1980–81 it had reached £18·8 million, and it has been suggested by the Under-Secretary of State that it will reach about £31 million in 1982–83. I accept that these are dramatic increases but they have been paralleled in England. In 1970 criminal legal aid costs in

England were about £8 million. By 1981–82 they had increased to over £100 million. The increase is not a unique Scottish phenomenon.
5.45 pm
It is perhaps relevant to remind the Minister that, for example, the costs of running the Crown Office between 1978–79 and 1982–83—this is something entirely within his own control—increased from £3·7 million to £8·1 million. I accept that there is a problem, but it is right to put it in perspective. The average cost of the criminal account between 1978–79 and 1981–82 has increased by 67 per cent. but it is fair to remind the Minister that in the same period the retail price index increased by over 50 per cent. Given the rise in the number of criminal cases because of the increase in crime under this Government and the general escalation in prices, one would expect a substantial increase in costs in any event.
The point that we wish to hammer home in the next few minutes is that we must not have a legal aid system that is tailored to please the Exchequer and the Treasury. The system must be constructed in a way that gives adequate cover to those who may be in hazard before the courts, who have a stateable defence and who are not in a position to finance it privately. The costs of litigation in both the criminal and civil courts are now substantial. The Minister should reconcile himself to the fact that we shall probably have to pay increasing sums to protect the essential liberty of the subject, the right to be properly defended if he is in trouble with the law, whether it be the civil or criminal law.
The Minister may be able to reassure me that he is happy to accept the sense of the amendment if not the wording of it. That in itself would be of considerable assistance to my right hon. and hon. Friends. If the Minister were to say "There is just a little too much of a story in the amendment and it is not necessary, but I accept that there is a primary duty to provide adequate and comprehensive legal representation in the civil and criminal courts, which is something that I shall always bear in mind and that will be my overriding priority when it comes to considering the regulations that may be made under the clause", I should not want further to delay the passage of the Bill.
The problem is that we are plunging into unknown territory. The Under-Secretary of State talked in Committee about the varying rates of success in legal aid applications in the courts in different areas in Scotland. He said that some courts had been too niggardly while others had been more generous. Perhaps it was typical that he refused to say exactly what he thought the right balance should be. We rightly pressed him on the need to extend the legal aid system to take account of tribunals, which are becoming increasingly important in the legal experience of ordinary citizens. His response was to give us little except an obvious reference to the availability of legal aid advice and assistance before the representational part of the tribunal came into play—in other words, preliminary advice as distinct from representation.
The lay members who staff Leith citizens advice bureau have made strong representations to me. They have said clearly and forcefully that they are increasingly aware of their difficulties and shortcomings when they must represent people before tribunals, because legal aid is not available. They feel that sometimes, with the best will in


the world, they cannot do as good a job as they would like. When the Minister discusses the new system, I hope that he will give some reassurance on that point.
We have not had adequate cover in the criminal courts. The Solicitor-General works at a more rarified level than I did when I worked as a lawyer. Nevertheless, he must know that there are many occasions when legal aid in the criminal courts is refused and it is not in the interests of justice. For example, a single unemployed man who lives with his parents and receives £20 a week in benefit has little chance of organising and financing a proper defence with recognition of witnesses, court time and the rest.
We are giving Ministers a blank cheque. Moreover, it is being signed in uncomfortable circumstances. Conservative Members have talked of value for money, the costs getting out of control and unnecessary work being done.
We must demand some reassurance from the Solicitor-General now. If he accepts the amendment or at least its spirit, he will be doing something to reassure those people who genuinely feel that there is a danger of our moving towards a two-tier system. It is satisfactory that in Scotland even people who are extremely poor can obtain legal representation. We may get to a point where someone who is disadvantaged may only be able to get second-class legal service because of a lack of an adequate spread of quality representation which the legal aid scheme, of which we can be proud, has provided until now.

Mr. Robert Hughes: Is the Solicitor-General satisfied with the working of he legal aid scheme? Inevitably the problems that Members of Parliament face are those of people who feel that they have been badly treated by a refusal of legal aid. The Solicitor-General must take account of what is not adequately borne in mind by solicitors in Scotland—people who apply for legal aid do not understand the law. What is more, they may find if difficult to understand words that are perfectly plain to a lawyer. What may be a clear letter to a lawyer is probably gobbledegook to the average person. Something must be done about that.
When legal aid is refused, a person's solicitor should be duty bound to advise him as clearly as he can, verbally and in writing, of any rights of appeal that he may have against that refusal of legal aid. I recently had a case of a young man who had been in trouble from time to time and who applied for legal aid to bring a case of wrongful arrest against the police. He was refused legal aid on the ground that the case was unreasonable. I have now seen the letter, six months after the event. There is nothing in it to tell that young man whom he should see or what he should do if he is not satisfied. Eventually, a sympathetic neighbour brought him to see me. We went through the case. I have to do my best to discover the reasons for the refusal and to ensure that they are spelt out properly so that a feeling of injustice is not perpetrated.
Will the Solicitor-General advise me whether any method of appeal is properly explained to those people whose claim for legal aid is turned down?
My second point is about the first three clauses of the Bill and legal aid in claims to vary alimony in the Court of Session or a sheriff court. I hope that I am right to assume that as a result of changes to earlier clauses in the Bill which allowed divorce actions to take place in a sheriff

court an alimony settlement can also be taken care of in the sheriff courts. That gives rise to the possibility of an anomaly which should be examined.
What happens if an alimony has been settled by the Court of Session? Does the person who wishes to vary the amount of alimony have to go to the Court of Session for that to happen or can he go the sheriff court? This issue is related to legal aid. A few weeks ago a man told me that he had become redundant in September 1982. He has no income other than social security but he must make an alimony payment every week. The state will not help him to make that payment. His ex-wife will not claim social security on her own behalf so he is building up tremendous arrears in his alimony payments. He asked me how he can go back to work because of those arrears. Through his solicitor, he applied to the Court of Session to have the alimony payment varied. That was way back in September. A fortnight ago, he was advised that there was no hint when his case might be heard in the Court of Session. Every week, his alimony payments build up. He has no recourse—the debt is building up all the time and he must eventually pay it.
It is ridiculous that that man must wait so long. It has been suggested that one of the reasons for the delay is that his claim for legal aid is taking up the time. Either way, the man is in serious financial difficulties. He may not be helped by the proposed change in the law. I suspect that that is so. We must wait and see. Nevertheless, will the Solicitor-General say whether claims for variation in an alimony payment that has been set by the Court of Session can be changed in the sheriff courts?
Finally, what is the precise date when the Bill will come into force? The House passes eminently reasonable legislation with the best spirit in the world, but finds years later that sections of an Act have never been brought into force. I shall not give examples of that. If I did, I should speak from now until midnight, which would not make me popular with many of my hon. Friends.
I hope that the Solicitor-General will reassure me on those points. If he wishes to reply by letter I shall understand, but I would prefer an answer today.

Mr. John Maxton: After the shenanigans and running about of a few minutes ago, I felt the importance of the principle that when Bills relating to Scotland come before the House they should be discussed and not hurried through as quickly as possible. I should be extremely pleased for Bills such as this to be discussed not here but in an assembly in Scotland. However, while these issues are dealt with here, they must be discussed here.
This is the first time that the Bill has been discussed on the Floor of the House. Its Second Reading took place in the Scottish Grand Committee. Although the Opposition do not object to the Bill, especially clause 3, my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) was right to table this amendment so that we could express our underlying suspicion about the Government's motive in introducing the clause. The Opposition feel that the principle is right, but we are not sure that it is being introduced for the right reasons. We said in Committee and on Second Reading that cheapness of the legal aid system rather than efficiency is what the Government are after.
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The Government too often confuse cheapness with efficiency. They think that they are one and the same


thing. They are not. To me and my hon. Friends, an efficient legal aid system is one that ensures that a person who is in need of legal help receives it. Poor people should have the same chances of obtaining proper legal representation in the courts as those who have money. Too often in the past, before the introduction of legal aid, that was not so. Even to this day, it is fair to say that the better off one is, the better chance one has of obtaining justice in our courts. Legal aid is designed to stop that.
Therefore, we must ensure that we have the best possible system. My hon. Friend the Member for Garscadden is going some way towards achieving it. In a recent case I spent much of the evening on the telephone to a legal company and the police station. Legal aid should be extended to people who are in custody in police stations. It might be a benefit over the weekends. We have a worry and suspicion that the Government are simply trying to save yet more public money through the Bill. We have had their assurances, and we shall watch very carefully what happens.
Legal aid is available for lawyers who give advice to people who come before tribunals. It should be available to other people who give advice to those who come before tribunals. My hon. Friend the Member for Garscadden, who is a lawyer, expresses shocked astonishment. In industrial tribunals, trade union officials and others represent people. Their expertise is often better than that of lawyers. They, as well as lawyers and solicitors, should be entitled to legal aid.
We should also extend the principle of legal aid to those who actually appear at tribunals to represent people. They do not just give advice. I do not include some of my hon. Friends in that, who I gather appear at tribunals for their constituents. Other people who appear at tribunals to represent people should be entitled to legal aid, even if it simply covers their expenses.
I know that at this late stage my hon. Friend may not press his amendment to a Division if the Solicitor-General does not accept it. However, he is putting down a marker to the Government that we shall watch carefully the way in which the Government administer clause 3 so that we can ensure that the legal aid system does what it is designed to do. It should not save the Government money or give the legal profession extra money; it should ensure that poor people have a fair deal in the courts.

Mr. Robert Maclennan: I give my support on behalf of the Social Democratic party to the principle underlined in the amendment. On the face of it it seems inadequate to have provisions in clause 3 empowering the Secretary of State to make regulations for legal aid as seems to him appropriate without a governing principle as the background against which the regulations are made.
I acknowledge that in making his regulations under clause 3(1)(d), it is open to the Secretary of State to
prescribe the general principles in accordance with which those who may be responsible in that regard should conduct any such assessment, taxation or review
However, the power in clause 3 is wide. It would have seemed appropriate for Parliament to set forth in the clause the general objective of legal aid. Although the wording in the amendment moved by the hon. Member for Glasgow. Garscadden (Mr. Dewar) is not wholly appropriate—he acknowledged that there might be a better way of putting it—I have no doubt that the underlying purpose of the

amendment should have the support of the House. Therefore, I hope that the Solicitor-General will give the assurance sought by the hon. Gentleman.
The purpose of legal aid provisions should be to provide adequate and comprehensive legal representation. The governing consideration should not be the possibilities of reducing public expenditure. If the regulations promulgated by the Secretary of State, subject to the conditions proposed in the amendment—the "shall have regard" principle—were thought not to have regard to that duty, would it be possible to strike them down? It would be of interest to know whether it would be ultra vires for the Secretary of State to promulgate such regulations without having regard to that duty, if the amendment were accepted.
I hope that the Solicitor-General can set our minds at ease by saying that the Government intend that primary duty to be observed by the Secretary of State. It cannot be wholly satisfactory to have such an assurance, as the legislative history of the Bill cannot be prayed in aid in the courts to support a claimant of legal aid, if it is turned down under the Secretary of State's regulations. However, such an assurance would go some way towards meeting our anxieties.

The Solicitor-General for Scotland: I shall answer first the specific points that were raised by the hon. Member for Aberdeen, North (Mr. Hughes). He referred to an application to make a claim against the police for wrongful imprisonment. I understand from what he said that that was a civil claim. In such circumstances there should be a right of appeal. If the hon. Gentleman would like to write to me in greater detail about that case, I shall be able to deal with the matter more satisfactorily.
With regard to aliment or variations of maintenance orders, which might be the simplest term to use, I hope that I can reassure the hon. Gentleman that not only under the Bill but under existing legislation it is already possible to provide for such variation orders to be made in the sheriff court. That will happen after the Bill passes into law.
I take something of a swerve as I cannot give the hon. Gentleman a definite date for the implementation of all the provisions of the Bill, but generally speaking it is hoped that the transfer or the extension of jurisdiction in divorce matters to the sheriff court will be achieved not in 1983, but during 1984. Clause 2 allows for the variation in the requirement of corroboration. That provision might be brought into effect at an early date.
The hon. Gentleman put his finger on an important point about the assessment of means by the DHSS to establish the financial eligibility of applicants. Sometimes that can take some months to determine, especially if there has been a change in the circumstances of the applicant, for example if he has lost his job. Sometimes the Law Society of Scotland is accused of taking an unconscionable time to process a legal aid application when in fact a complicated investigation is made into the financial status of the applicant. That is the cause of the delay. The Government are concerned at these delays, and are considering what can be done to improve matters.
I have been asked about the possible extension of legal aid to tribunals. We considered that matter in Committee, and it has been considered frequently in the House. Few people would like to see the extension of legal aid to tribunals. In those circumstances, there are some


reservations about so doing, particularly where the tribunal is informal. If such tribunals became overladen with legal arrangements, they might work less successfully.
The short answer is that, however undesirable that may be—whether one uses the term "cascading" or otherwise—it is difficult enough at present to fund the existing requirements of legal aid in civil and criminal actions without looking to further extensions of the areas in which it might be available.
I am somewhat anxious about trading statistics with the hon. Gentleman. Whenever I or my hon. Friend the Under-Secretary have attempted to explain the size of the problem, it is seen immediately as a suspicious set of circumstances and is taken as a clear indication that the Government are hell-bent on dismantling the legal aid services that are provided.
As hon. Members will appreciate, that is far from the truth. There is nothing in the Bill that sets about dismantling the legal aid provision that has been made in Scotland since the introduction of that facility.
One set of statistics that might interest the hon. Gentleman is that the cost of criminal legal aid in Scotland in 1971 was £0·75 million. After allowing for inflation, that figure might have been expected to rise in a decade to about £3 million. During that period there was an unfortunate increase in the number of crimes committed in Scotland. Accordingly, there were about 25 per cent. more applications for legal aid. Nevertheless, during that period, the cost of criminal legal aid rose from £0·75 million to about £17 million.
I do not think that anyone looking at this problem can be under any doubt whatsoever that there has been a staggering increase. It is right that the House should ensure that we are getting value for money from the legal aid service that is being provided out of taxpayers' money. The Government would be abdicating their responsibilities if they failed to look at that.
Some people feel that these provisions—particularly clause 3 and to a lesser extent clause 4—set up a considerable scheme to demolish the legal aid system.
As I said on Second Reading, the Lord President of the Court of Session, who has the responsibility for such matters at the present time, said
that the present arrangements placed him in an invidious position between his responsibilities to the legal profession and his relationship with the Government of the day."—[Official Report, Scottish Grand Committee, 22 November 1982; c. 7.]lb/>
The aim of legal aid legislation is to secure that legal aid is available where it is most required, having regard to the financial eligibility of the applicant, the merits of the case in civil actions and the interests of justice in criminal cases. It may be necessary from time to time to review the arrangements in order to ascertain how far legal aid is made available to the most deserving cases. That is not strictly a matter for the Bill.
6.15 pm
The aim of the Bill is to secure a fee structure that takes due account of lawyers' costs and relates remuneration to work reasonably and necessarily done. In considering increases in fees, we shall have regard to those costs and increases in fees and to the relevant guidelines for professional remuneration for public services. It is at this

stage not possible to predict what form of fee structure will emerge, but I have no reason to believe that it will be such that lawyers will be reluctant to provide their services.
The hon. Gentleman is concerned that in some way a fee structure will emerge that will be so miserly that the best in the profession will in one way or another refuse to participate in the legal aid scheme, thereby creating a second-class system.

Mr. Gregor McKenzie: My Friend the hon. Member for Glasgow, Garscadden (Mr. Dewar) made a point about the attitude of the Government to legal aid, and that worries many people. What the Solicitor-General for Scotland said about the difficulties in funding the present scheme gives rise to further suspicions in the minds of many people, especially in view of the statements made by the Lord Chancellor and other senior members of the legal profession. The Solicitor-General for Scotland is not doing too good a job in reassuring me.

The Solicitor-General for Scotland: At the centre of this issue is the transfer of responsibility for the setting of fees and the establishment of a proper structure from the Lord President of the Court of Session in Scotland to the Secretary of State for Scotland.
I have said on more than one occasion that the Lord President finds himself in an invidious position. He must on the one hand deal with the Government and the Treasury, and on the other he has his responsibilities to the legal profession. The Lord President has done that up to now. It is proposed that the Secretary of State should take over that responsibility. Clause 3 does not mean that existing legal aid provisions will totally disappear for those who deserve it because of their financial status or the case that they present to the courts. Those fundamental principles behind our legal aid system will not vanish or be ignored.
It is necessary from time to time to ensure that we are getting value for money and that the legal aid system is the best that can be arranged. The fact that lawyers provide, or would provide, a lower standard of service to legally aided clients has not been represented to me. I would be surprised if either the Law Society or the Faculty of Advocates were to make such representations.
There are examples in health and in other areas where the Government are a major purchaser of professional services. Experience there suggests that the assumption by the Government of responsibility for determining legal aid fees should not materially affect the availability of lawyers to provide the service. As under the present arrangement, a proportion of lawyers may not wish to participate in the legal aid scheme. The right hon. Member for Rutherglen (Mr. MacKenzie) was not a member of the Committee on this Bill. He might be reassured by my saying that, under the existing arrangements, legal aid applications are at present considered by the courts in a criminal case or by a legal aid committee in a civil case. Nothing in this scheme alters that. That is important, and I hope that it will reassure the right hon. Gentleman.
I am much more optimistic than the hon. Member for Garscadden that lawyers will be willing to continue to provide legal aid. It is wrong to suggest that the net effect of simply transferring these responsibilities from the Lord President to the Secretary of State for Scotland, will be to establish a second-class service in Scotland. Although I am not prepared to accept the amendment, I hope that the


hon. Gentleman will be reassured that, despite his anxieties, this change in the law will not result in the horrors that he suggests. It is much more of a mechanical arrangement than he seems to suggest.

Mr. Maclennan: The hon. and learned Gentleman could ease our minds immediately if he would assert that in framing regulations the Secretary of State will have regard to the need to provide adequate and comprehensive legal representation in the civil and criminal courts. Can he give us that simple and specific assurance?

The Solicitor-General for Scotland: I have already explained that, under the existing arrangements, the provision of legal aid in criminal matters is largely determined by the court and by legal aid committees in civil matters. To some extent they have a discretion. I could understand the hon. Gentleman's concern if this were a fundamental alteration in the way that legal aid is dispensed. That is not so, and I do not believe that the anxieties that he and other hon. Members have voiced are well-founded.

Mr. Dewar: With the leave of the House, Mr. Deputy Speaker. I hope that the Solicitor-General for Scotland is right. I entirely accept that clause 3 is not necessarily sinister. Had that been so, we would have opposed it in principle.
We approve of the constitutional change, but we are worried about the rhetoric that has surrounded it, not necessarily from the hon. and learned Gentleman but from some of his colleagues. That has resulted in anxiety among many hon. Members, which is understandable in view of what has been said.
I am not impressed with statistics that go back to 1970 or 1971. I cannot remember exactly when the criminal legal aid scheme was introduced, but I suspect that the Solicitor-General for Scotland was taking a base year when it was at a rudimentary stage. That does not necessarily compare like with like.
We accept that the Secretary of State, who pays for the legal aid scheme, should have a controlling say, subject to proper consultation, in the fee structure for advocates and solicitors. I have no objection to that at all. However, it places an enormous onus on the Secretary of State to exercise that power properly. He must remember that his duty is to the public, to the people who use the courts and

to the administration of justice—not to the Treasury. That duty sometimes seems to be misplaced, especially when we consider the aggressive tone of some of the speeches that have been made. I accept the hon. and learned Gentleman's assurances, but we shall watch carefully the progress of negotiations and the regulations that are made under this clause. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 4, in page 3, line 13, leave out lines 13 to 17.—[The Solicitor-General for Scotland.]

Schedule 1

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendments made: No. 6, in page 6, line 37, leave out from 'of' to end of line 38 and insert
'any of the matters which the Secretary of State may regulate under or by virtue of section 14A of the Legal Aid (Scotland) Act 1967.'.
No. 7, in page 6, line 40, leave out 'At the beginning of and insert 'In'.
No. 8, in page 6, line 41, leave out from `etc.)' to end of line 2 on page 7 and insert
'after the word "agents" there shall be inserted the words "(other than such of the fees of agents as the Secretary of State may regulate under or by virtue of section 14A of the Legal Aid (Scotland) Act 1967)".'.
No. 9, in page 7, line 4, leave out 'At the beginning of and insert 'In'.
No. 10, in page 7, line 6, leave out from 'Sederunt)' to end of line 7 and insert
'after the word "fees" there shall be inserted the words"(other than such fees as the Secretary of State may regulate under or by virtue of section 14A of the Legal Aid (Scotland) Act 1967)".'.— [The Solicitor-General for Scotland.]

Schedule 2

ENACTMENTS REPEALED

Amendment made: No. 11, in page 9, line 38, leave out `16(2)' and insert '16(1)(b)(i), (2)'.—[The Solicitor-General for Scotland.]

Motion made and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Conwy Tunnel (Supplementary Powers) Bill

As amended (in the Standing Committee), considered.

New Clause 1

EMPLOYMENT OF LOCAL LABOUR

Any contract entered into by the Secretary of State for the purpose of carrying out the tunnel works shall include such provisions as the Secretary of State considers appropriate for securing so far as practicable the maximum employment in carrying out those works of persons normally resident in the area formed by the counties of Gwynedd and Clwyd.".—[Sir Anthony Meyer.]

Brought up, and read the First time.

Sir Anthony Meyer: I beg to move, That the clause be read a Second time.
The project for a submerged tunnel across the Conwy estuary is a major building and civil engineering operation. It is, therefore, natural that people in north Wales concerned about employment in the area should look on it largely in the light of the number of jobs that it will provide.
In the area of the tunnel itself—the Colwyn bay travel-to-work area, which includes Conwy and Llandudno junction—the level of male unemployment is 17·3 per cent. and the overall level of unemployment is 13·9 per cent. At the last count in December—this is somewhat out of date because the new figures that should have been published this week have been held back by a week—a total of 3,782 people in the immediate area of the tunnel were unemployed.
Further west, in the Bangor travel-to-work area, the male level of unemployment is 20·2 per cent. and the overall level is 16·2 per cent. The number of people out of work is 3,943.
The picture becomes really scary when one travels east into my own constituency to the Rhyl travel-to-work area. There, the level of male unemployment is an almost unbelievable 29.2 per cent. and the overall level is 22 per cent. In terms of bodies, that represents 4,130 people, a figure that is expected to rise when the new figures are announced in a week's time.
It is not surprising that the project should be seen not merely in terms of the enormous benefits that it will bring to the area as a result of new industry and improved communications but in terms of the number of jobs that it will provide.
Even though the scheme will inevitably create many jobs, there is the possibility that it will draw in labour from outside, and not merely from England, because we are the receiving point for traffic coming from Ireland. The Irish are highly skilled in civil engineering and construction and there is every likelihood that the scheme will suck in many Irish work men.
I have nothing against Irish workmen, but once the scheme is finished and they have discovered the joys of living in north Wales—there can be fewer more agreeable places in which to live—they will remain there out of work, thus swelling the dole queue. The risk is that one ends up with a higher level of unemployment than one started with.

Mr. Dafydd Wigley: I am sorry that I missed the opening remarks of the hon. Member for Flint, West (Sir A. Meyer) but I was in Committee. The experience that he describes is one that we suffered during some of the major capital projects in North Wales in the late 1950s and 1960s. He will be aware that the problem was successfully overcome in the Dinorwic scheme, where a provision in the relevant Bill that was similar to the new clause that the hon. Gentleman is moving today, was included. That provision was of tremendous value to the Dinorwic scheme and it was coupled with sensitive management of the scheme. We were very lucky in having Mr. Iorwerth Ellis as manager of the scheme. He had an empathy with the area and was therefore able to carry out the provisions of the clause in a sensitive manner. Those two factors taken together overcame the problem. For that reason I welcome the new clause.

Sir Anthony Meyer: I am most grateful. I was about to speak on that point and to refer to the scheme. I paid a visit to the scheme in the early stages and I thought that it was not merely one of the most impressive bits of civil engineering that I had seen anywhere in the world but one of the best managed projects that I had ever seen. The hon. Member for Caernarvon (Mr. Wigley) is right to refer to the empathy that existed at all levels during the entire scheme.
I pay tribute to my hon. Friend the Member for Conway (Mr. Roberts), who is busily engaged in Committee. He is more closely affected by the scheme than anyone else and fought very hard to get such a scheme included in the Dinorwic legislation. If he were free to do so, I am sure that he would speak in favour of the new clause.
I am aware of the difficulty of framing a clause that avoids all the pitfalls. A previous attempt was made to move an amendment and it was found to be defective. It is the experience of all Back-Bench Members that any amendment that they try to move is defective. I have taken the best advice that I can in the present case and I hope that I have hit upon a formula that does not fall foul of the Sex Discrimination Act 1975, the Race Relations Act or the Trade Descriptions Act. I hope that the definition of areas is clear.
I stress that the new clause refers to Clwyd and Gwynedd. Although the project is in Gwynedd, it is on the borders of Clwyd, which has an even grimmer unemployment problem than Gwynedd. I am sure that the hon. Member for Caernarvon will not complain about the inclusion of Clwyd. That helps to make it much more workable.
The wording of the new clause is deliberately flexible, because obviously many skilled jobs will have to be done in this connection and it would be absurd if the whole scheme were to be held up because nobody was available locally with the necessary skills for one particular enterprise. I hope that the wording of the new clause is about right and I look forward with a mixture of hope and trepidation to what my hon. Friend the Minister has to say.

Mr. Alec Jones: It is not my intention to delay the passage of the Bill on this new clause, which has some very good lineage. As the hon. Member for Flint, West (Sir A. Meyer) said, it follows very closely section 48 of the North Wales Hydro-Electric Power Act of 1973. Everyone seems to agree that that worked fairly well.
Those who have been to see the scheme have seen its advantage. Something along the lines of section 48 could be included now. I attempted to introduce a new clause in Committee but it ran into objections from the Under-Secretary of State, who told me that my word "workman" would offend the equal opportunities legislation and that my use of the word "areas" might be considered vague.
I took those words from the 1973 Act and I say to the hon. Member for Flint, West that his ingenious new clause seems to have avoided all those pitfalls that the Under-Secretary of State pointed out to me. The new clause does not tie the hands of either the contractor or the Secretary of State. It gives considerable flexibility to the Secretary of State and, at the same time, by avoiding the word "workman" and using instead the words "persons normally resident" and defining the areas of Gwynedd and Clwyd, he has provided a formula that should be acceptable to the Government. After all, the Under-Secretary of State made some very sympathetic noises in Committee.
In the knowledge that the idea behind the new clause has support from both sides of the House, I hope that the Under-Secretary of State will accept it. One has to bear in mind the appalling unemployment figures mentioned by the hon. Member for Flint, West, and it would be a tragedy if we in this House did not do everything possible to ensure that such a great new venture employed as many from that area as possible.

The Under-Secretary of State for Wales (Mr. Michael Roberts): In Committee several hon. Members gave their support to a clause of this nature. This new clause was introduced by the hon. Member for Flint, West (Sir A. Meyer). Over a long period, he has shown his vigilance in looking after the interests of the unemployed and stressing the importance of employment prospects for the whole of north Wales. He has obviously consulted well on the wording of the new clause and the Government are prepared to accept it.
However, no one should imagine for one moment that in accepting the new clause, we are indifferent to considerations of economy. Like anything else for which the taxpayer foots the bill, the road must be built as economically as possible but, consistent with that principle, I am sure that the contractors will do all they can to ensure that the employment opportunities that it offers benefit the residents of Gwynedd and of Clwyd.
With its advantage of being on the spot, I would in any event expect local labour to be on the inside track and to be employed by any contractors involved in major work in that area.
This exceptional case should not be regarded as a precedent for departing from the Government's view that authorities placing contracts should not become involved in imposing requirements about the make-up of a contractor's labour force. Some authorities are attempting to apply, across the board, arbitrary and detailed requirements on contractors for political and ideological reasons. My acceptance of the new clause today should give them no encouragement whatsoever.

Question put and agreed to.

Clause read a Second rime, and added to the Bill.

Motion made, and Question put, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Opren

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]lb/>

Mr. Jack Ashley: The story of Opren is remarkable because it is a study of contrasts. A meteoric rise in popularity was followed by a dramatic collapse of confidence after nearly 3,000 adverse reaction reports, including 76 deaths. For some, it is a totally discredited drug; for others, it is still a big advance in arthritic treatment. It was produced by a company called Dista that was respected by the Committee on Safety of Medicines, yet its parent company in the United States of America, Eli Lilly, was investigated by the Food and Drug Administration and accused of deliberately concealing adverse reactions.
The way in which the CSM dealt with Opren raises issues crucial to drug safety. I have given the Minister for Health, whom I am glad to see here, notice of my major points, especially seven vital questions, and I would appreciate direct replies. Opren has caused immense disquiet amongst patients and it has shaken public confidence in the safety of drugs. No doubt it has also caused concern among drug companies.
Three hundred million NHS prescriptions are issued every year, and 4,912 drugs are on the market. Few individuals can assess the safety of the drugs prescribed. Nearly all of them are totally dependent on doctors, who in turn are very dependent on the CSM. So the responsibility of the CSM is enormous. What resources are available to fulfil this responsibility? The CSM has a mere 15 pharmacists and £1 million worth of resources at a net cost to the Government of £250,000. Compare the trifling £1 million spent on the CSM with the £1,000 million spent on the drugs that it monitors.
Ministers mouth the platitude that there is no safe drug and that we must balance the benefit and the risk. We know that, but they seem to assume that the use of this phrase exculpates them from all responsibility. They are wrong. Their job is to ensure that the balancing is properly carried out. My first question to the Minister is whether he agrees that the gross and net expenditure on the CSM is wholly inadequate in comparison with its responsibility for drug safety, and if so, what is he going to do about it. The main adverse effects of this drug were on the elderly and we want to find out whether the CSM could have foreseen them, and whether it should have suspended the drug earlier.
It is difficult to unravel those questions because of the deplorable secrecy and shiftiness of Ministers at the DHSS, who have sought to withhold vital information from Parliament. In a parliamentary question last December I asked whether the clinical trials had included old people, and the evasive reply from the Under-Secretary of State was that in its application for a product licence the company gave information about the drug and the elderly. I followed that up a few weeks ago with the crucial question whether the information provided by the company showed any significant difference in the reactions of elderly and younger people to the drug. This time the scandalously stonewalling reply from the Minister for Health merely referred me back to the earlier reply. Of


course, the earlier reply did not contain the information, or there would have been no need to ask the second question.
Consequently, Parliament does not know whether the clinical trials for Opren included the elderly and, if they did, what the results were. It is preposterous that Parliament should not know. Members are entitled to this information, and my second question is whether the Minister is prepared to disclose it. Clinical trials are the means by which companies enter a lucrative market place. Unlike the American Food and Drug Administration, the CSM does not have the resources to carry out thorough investigations into them. The data of clinical trials should be publicly available, so that at the first hint of concern there can be independent investigation by professionals. My third question to the Minister is, will he make freely available the essential details of the clinical trials which companies submit to the CSM in support of their application for product licences?
Whether or not the company had given information to the CSM about the enhanced risks for the elderly, the CSM should have been aware of them, because Dr. Hamdy's research work, published in July 1981, showed that the drug persisted in the elderly and had a greatly prolonged half life. Dr. Hamdy said that the findings
may have profound therapeutic implications.
Although the company referred to those findings in a general "blurb" sent to GPs, it did not emphasise them, nor did the reference have CSM backing, nor was it in MIMS, the GPs' "bible". It should be the CSM's responsibility to warn GPs. Incredibly, 12 months elapsed before clear and specific instructions were given to GPs to halve the dose. The CSM accepted that Dr. Hamdy's study was a good one. It implied a grave danger to the elderly, yet for a whole year the drug watchdog failed to bark. My fourth question to the Minister is, why?
Dr. Prescott, a toxicologist who was formerly a member of the CSM toxicology sub-committee, said that Dr. Hamdy's research would have led him to advise reduced dosage for the elderly immediately. He always
wanted to err on the side of safety rather than chance it.
The CSM chanced it and decided to wait and see what would happen. What happened was that there was a flood of suspected adverse reaction reports from doctors—3,827 of them by January 1983, including 76 deaths. My fifth question is, what advice does the Minister give to the CSM if there is any doubt about safety—take precautionary action, or wait and see?
The pattern of reporting adverse reactions to Opren illustrates the fundamental weakness of the existing voluntary system—the so-called yellow card system. In the 18 months from October 1980 to March 1982, 28 deaths linked with Opren were reported to the CSM. Yet, in the four months from the end of March 1982 to the beginning of August, 33 deaths were reported. The difference was that before the publicity doctors were not suspicious about Opren, but the yellow card system relies on doctors voluntarily reporting their suspicions. Most of them tend to get suspicious later rather than sooner.
Suspicion is an emotional and unscientific basis for drug safety. Our inadequate system of drug safety will be

improved only with a more effective method of post-marketing surveillance—one based on full and accurate reports of all medical events happening to a sample of patients.
The Government are supporting some research in this area but their commitment is relatively small. My sixth question is, does the Minister agree that independent—not drug company—post-marketing surveillance based on the reporting of events is essential for drug safety, and, if he does, will the Government devote more resources to it?
Since Thalidomide there has been a succession of drug sagas of which Eraldin, hormone pregnancy tests, Debendox and Opren have been the most publicised. Good drugs have a crucial role to play in modern medicine, but the good drugs, and the good companies, are being damaged by scandals emerging because our safety precautions are inadequate.
I repeat my call for an independent inquiry into drug safety. We need to assess the strength and weakness of our present system and the likely value of the new systems being developed; we need to look at new ways of balancing drug benefit and risk; and we should consider what information we need, how we get it, and what use we should make of it. In particular, we should reassess whether the present practice of a drug being available for everyone or suspended completely is the correct one. Such a wide-ranging inquiry could and should radically alter our approach to drugs and enable us to derive more benefit at less risk.
Finally, I want to refer to a separate but related matter. "Panorama" did two splendid programmes on Opren and revealed a disturbing picture of the relationship between drug companies and the medical profession. If "Panorama" is right, there is no doubt that some people in the medical profession are bribed by the drug companies. My seventh question is, does the Minister accept this charge, and, if so, what does he intend to do about it?

Mr. John Farr: I congratulate the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) on once again using his initiative to express concern about something in a specialised field that he has championed over many years, in this case the misuse or misapplication of the drug Opren. I intended to listen to him in any event, but as we have plenty of time it might interest him and the House to know that about 15 months ago I consumed, at regular intervals, great quantities of Opren.
I was taking the drug under a doctor's prescription and was on it for about three months. I suffered a great deal of discomfort. If this had happened to an older person or to someone who was more infirm, the effect could well have been fatal. I was reasonably fit but my skin suffered the most tremendous prickling sensation and burning. I could not go into any form of sunlight without having my hands covered. Of course, I did not associate the most unusual discomfort with the drug because I was eating food normally and I had taken the drug on doctor's advice. I thought at first that there must be something unusual in the local sunlight and then that the discomfort was caused by another complaint. Eventually the pain was so intense that the only way I could recover was to go indoors out of the sun.
As I said, I was put on Opren by my doctor. At no time did he warn me that it might have ill effects. At no time was I led to believe by him or by anybody else that it had


not been properly tried and tested and had not passed the tests with flying colours. Therefore it is important that the questions that the right hon. Gentleman has raised are answered. It is of critical importance that we know why in Opren's case it was put on the market and prescribed by British doctors without its performance, which was suspect abroad, being properly taken into account. How can it be in this modern age that people in Britain are still not adequately protected by the law and can still be exposed to drugs that are not and never have been fit for human consumption?
I endorse 100 per cent. what the right hon. Gentleman has said. His questions must be answered. I want to know what account was taken of overseas experience in the use of Opren, and also to what extent general practitioners are pressurised by financial inducements to prescribe Opren and other drugs. From what I have learnt I believe that in many cases the drug companies and those who push these doubtful drugs offer large financial margins to doctors and others who prescribe them. That is totally wrong. Once again I congratulate the right hon. Gentleman on performing a public duty in raising the matter.

Mr. David Crouch: I find it hard to speak in this debate, which I do not think will be short because the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) has had the advantage of capturing time, and he does so on a very important subject. I find it difficult to speak because, as the House knows, I am a director of a drug company, not a small company and one not unrelated to this drug because it is a producer worldwide of an anti-arthritic drug. I will not say that it is similar because it is not, in chemistry, in any way similar to Opren, but it treats the same illness. I make no comment about that drug now. I am touching wood that it is found not to have ill effects.
I find it difficult to speak too because the use of Opren seemed almost indefensible when one had seen the "Panorama" programme. I welcome that programme, Anyone who is concerned about sick people must welcome any revelation about treatment offered to them that may be dangerous and may even cause loss of life, as is alleged by the right hon. Gentleman and has been reported in the press. We know that all drugs can be dangerous. A person can commit suicide with an overdose of aspirin. Yet aspirin is one of the most valuable drugs available to mankind as a pain reliever. It is a simple drug which has been on the market a long time and does not require a prescription. I would prefer that aspirin could only be bought from pharmacists but it is possible to buy it elsewhere. It is available for someone to overdose himself with, even by mistake. However, I do not want to labour the case of aspirin because we are talking about another drug—a new drug.
We shall be hearing shortly from the Minister about Britain's system for the protection of the public, the patient and the medical profession against the misuse of drugs, their wrong promotion and the marketing of any medical product which is unsafe. It is strange to think that it is only in recent years that a strict system, known as the Committee on Safety of Medicines, has been set up. That was the result of the Thalidomide scandal. Not only are the House, the public and the press worried about the Thalidomide scandal; so are the medical profession and the drug industry.
It can be said that the drug industry seeks to make profits. One can extend that phrase and say that it seeks to make profits out of the sick because drugs are sold not to fit people but to sick people. Thank God we have a system whereby drugs can only be sold to sick people on prescription through their medical practitioner or prescribed to them in hospital.
The right hon. Member for Stoke-on-Trent, South is one of the fairest and most reasonable Members of Parliament who, at the same time, has a sword of righteousness in his hand which he always uses with wisdom and good sense. He has acknowledged that drugs are an advantage. Good, proven and tested drugs are an advantage to mankind as life savers, pain relievers and pain killers. A great advance has been made in the last 50 years and the life of many in the Western world has been prolonged. Our hospitals, largely in the mental health area but in other areas as well, have been emptied. When I was a boy one of the great illnesses that one worried about was consumption. Chest hospitals are largely empty now, thanks to the great developments that stemmed from Alexander Fleming's invention of penicillin.
Enormous advances in pharmaceutical research have been made very quickly, moving further and further from the advances of Fleming and others. It is perfectly true that money for drug research in our society comes from the profits of the drug companies and not from Government grants. As we heard on the "Panorama" programme, medical research professors in America acknowledge that if it were not for the grants that they get from the drug industry they would not be doing the research that they are. Research in the drug industry is largely done in the drug companies. They come to the Secretary of State for Social Services and the Minister for Health to justify their profits every year in the light of their research and development programmes.
Successive Ministers of both parties have always recognised that certain profits are justifiable. Without them we would not have the drug industry that we have in Britain, which is among the world leaders in research achievement. Britain's achievement in the pharmaceutical industry is far greater than anything in the Soviet Union. The innovation, inventiveness and research that has been achieved is truly remarkable.
The Government must ensure that excessive profits are not made and that they make a regular surveillance of the drug companies' figures, both British and foreign—American, Swiss, German and others—which operate in Britain. Incidentally, those foreign companies operate in Britain because they find that there is a reservoir of scientific knowledge coming out of our schools, technical colleges and universities which enables the developments in research to proceed. Some of the principal drug companies in the world choose to base a large part of their research in the United Kingdom rather than in France or Germany. Yet West Germany is an important country in this development and Switzerland is famous for its activities in this area.
The Government have more than simply a financial responsibility on behalf of the people. Most drugs sold in this country today are sold through the National Health Service. The private sector is very small indeed. We know that the drug bill is big. It is 10 per cent. of the NHS bill. Ministers watch it like hawks and it is right that they should do so. Ministers also take into account the fact that


the industry makes a considerable net contribution to the net balance of payments of over £500 million a year—if I have my figures right. It is an exporting industry.
However, the Minister and the Government have another responsibility—to ensure that drugs that are marketed are safe and do not produce ill effects. All drugs can cause ill effects, if one takes too many or if they are prescribed for persons for whom they are not suitable. My hon. Friend the Member for Harborough (Mr. Fan) has suffered from Opren. We cannot talk about that now because I am not a scientist but I know that many others have suffered the side effects that he suffered from because I have seen television programmes and reports.
The Government must watch new drugs to know of the side effects before the drug is released to the public. That can be done only by extensive research in the industry and that is done. The Committee on Safety of Medicines sits a long time—years—before it allows a drug onto the market. It usually takes a company about 10 years to process a new drug and it takes about 12 years in all before it can be passed by the Committee on Safety of Medicines and released to the public. It is a matter of testing, testing, testing. Let us not mince words. That testing is done on animals, and then on human beings, but not without their permission, and only under the strictest medical surveillance.

Mr. Ashley: The House is always interested to hear the hon. Gentleman speak on drugs, because of his expertise, and he is entitled to go as wide as he wishes, but tonight I have made some serious allegations about Opren, the Committee on Safety of Medicines, and drug safety. We expect the Minister to reply, but would the hon. Gentleman care to comment on some of the allegations that I made?

Mr. Crouch: I apologise to the right hon. Gentleman. Perhaps I have digressed. I apologise to the House. I also apologise to the right hon. Gentleman because he spoke before me tonight, and I did not hear the first three questions that he put to the Minister. I hope, therefore, that he will forgive me. I shall have to leave it to the Minister to reply. He is in a better position than I am to reply, and I would not be so bold as to seek to reply. However, perhaps I might comment on one matter that the right hon. Gentleman raised—the over-promotion of the drug Opren.
Another issue which came from the "Panorama" programme was that there was not complete disclosure of the side effects that had been discovered in the United States. I cannot comment on the latter point, but I take it that that did happen. From what I have read, it seems that statements were made in the United States about side effects which were not fully disclosed in the marketing of the drug in this country. I can only say that I am appalled if that is true. I am appalled because there is no future for this industry, of which I have described the good side, if it ever falls by as much as a millimetre in its integrity in front of the public, or Parliament, or the Parliaments of other countries. All are concerned in the matter.
The programme also described the apparent junketing of a company—not this company, but an Italian company—taking the Orient express to Venice to talk to doctors, rather than talking to them in Manchester—as I think one of the doctors said could have been done, although he added, with a smile, "I don't think that I

would have gone to Manchester, rather than to Venice." Even so, it stretches my credulity to think that a junket on the Orient express is the way to promote an idea among rheumatology consultants. It is a pity.
It is true that the Association of British Pharmaceutical Industry, the ABPI, has a strict code of practice for its members about how to present their case to the medical profession. The only trouble is that they are not allowed to advertise to the public, and I do not believe that they should ever be allowed to indulge in public relations. That also came out in the programme.
The doctor's judgment in prescribing medicines must be his medical judgment, based on his medical knowledge and his knowledge of his patient. It is true that some drugs prescribed for one patient are never prescribed for another, because when the doctor looks up the medical history and sees certain conditions in the person's health and history he will know, by knowing the side effects that are notified on the data sheets of the drug, that perhaps those drugs are suitable for patient A, but not suitable for patient B, or not in that dosage, or should perhaps be given at another time of day, and so on.
I have the highest regard for the medical profession's approach to the whole drug question. What worries me about promotion is how to bring to the notice of the medical profession the developments in the drug world.

Mrs. Gwyneth Dunwoody: rose—

Mr. Crouch: If the hon. Lady wishes to intervene, I shall willingly give way to her because of her professional interest.

Mrs. Dunwoody: It is not my profession, but I am most grateful to the hon. Gentleman for giving way. Will he acknowledge that if anyone wants to know what drugs are available there is an excellent British national formulary that all doctors can use?

Mr. Crouch: The hon. Lady is quite right. I imagine that she is talking about the BP—the British pharmacopoeia.
I have found—I am sure that the hon. Lady has found it in her shadow responsibility—that general practitioners are busy people, and that after 20 or 30 years of practice they are often 20 or 30 years out of date with the latest developments. Of course, one of the ways they get their information is by mail, by reading The Lancet, the BMJ, and the advertisements.
However, we come back to the point: what goes into those advertisements must be most carefully scrutinised and controlled, and if there has been any lack of control in the case of Opren of what could be said, if there was a falling from the highest standards by the company, it is up to the Government to spot it or to the trade association involved. Failure by one part of, or one company in, the drug industry is in a way a reflection on the whole. That is why I said when I rose to speak tonight that this is a difficult subject for me to speak on.
I am grateful to have had this opportunity to make a small contribution to the thoughts and concern about this matter. I am as concerned as anyone else, because I want to defend the integrity of the industy. If the industry's integrity has been harmed by this, I hope that the Minister will tell us that he and the Government, together with the industry and the medical profession, will tighten up the controls so as to prevent any such tragedy from occurring again.
I give warning to the Minister, the Government, and the House. They should remember the words that were spoken by Professor Wright of Leeds university, a consultant rheumatologist interviewed in that programme. He said—I quote him very loosely—that the system of control is basically right and that the Committee on Safety of Medicines is basically a good system, but he added that we must not stifle research. We must not do that, because it has been such an advantage to mankind to have had that development in this field. We do not want to stifle it, but at the same time we must ensure that it proceeds safely for us all.

Mrs. Gwyneth Dunwoody: I am grateful to my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) for raising this matter. He has a long record of commitment to important matters, and I am second to none in my admiration of the work that he does in this House and outside. He has raised a number of questions which have wide implications, and I hope that the Minister will address himself to some of them.
First, I make no criticism of the Committee on Safety of Medicines. I know Professor Goldberg to be a man of honour and high intelligence, and I am sorry that he feels that by selective editing some of his recent remarks were perhaps misinterpreted. However, there may be a good case for looking at the powers of the committee. It seems that in this country we do not have sufficient independent research or independent access to information about drugs. We all know about the problem of the drugs cocktail and the constant flow of adverse drug reaction bulletins that are sent to general practitioners. I should like the Government to commit themselves to a much wider system.
There is a specific role for the pharmacist in this connection. A working party set up by my group of the national executive committee of the Labour party has been considering ways in which drug use can be recorded by the pharmacist. As the Minister knows, in many instances in hospitals the pharmacist has easy access to the consultant who is doing the prescribing, and he has the right to discuss most of the implications of the use of drugs as well as the cost and any adverse reactions that are recorded. The private pharmacist does not have that help.
There may be a good case for moving to a system whereby pharmacists record the history of individual patients' drugs. Busy general practitioners, of whom the hon. Member for Canterbury (Mr. Crouch) spoke, will often prescribe drugs but not necessarily give all the relevant information about the effect of that drug. They may mean to, but they may not have the time or always succeed in conveying the full message.
It is important that the pharmacist should fulfil the role of counsellor and should be able to use his highly specialised knowledge to assist patients to understand the implications of the drug and the effects that it could have when taken in conjunction with other substances.
I shall return to the subject of the Committee on Safety of Medicines. I am not always an uncritical admirer of the Food and Drugs Administration in the United States, but that organisation has different and in some instances wider powers. Does the Minister intend to look at the powers of the Committee on Safety of Medicines to see whether they should be strengthened? If it had teeth with which to bite some of the pharmaceutical companies, we should not be in our present position in relation to some substances. Will

he talk to the Department of Education and Science on the important subject of who actually does the research into individual drugs?
The hon. Member for Canterbury, who is a man of great honour and who I know would not seek to mislead the House, said that he was satisfied that many multinational drug companies operate in this country and manufacture drugs here because they know that our universities have a pool of expertise and academic brilliance. I do not disagree. It supports the argument that a great deal of the research should be taken away from the drug companies.
If all the information about every drug, good or bad, in all its clinical tests were made available through the universities, we might avoid some of the difficulties that have arisen through substances producing adverse reactions. I hope that the Minister will say that he is not content simply to talk about the difficulties that have arisen in this company, but will give some undertakings.
What does the Minister believe to be the future of pharmacists in this country? Is he prepared to see them undertake a wider role? Will he undertake to look seriously at the system of post-marketing surveillance to ensure that a great deal more is done than at present? Often, the doctors, who should most rapidly report adverse drug reactions, are so deeply involved that it is only when a number of cases are brought to their attention and they publish their findings that other members of the medical profession join in and say, "Yes, that is true. There is some evidence of that reaction." That may be too incomplete a method of ensuring the patient's safety. I should like to see the role of the Committee on Safety of Medicines strengthened and widened so that it could consider all these aspects. It should have a much stronger say in what happens in relation to the pharmaceutical industry.
We are in a difficult position. Throughout the world there is a tendency to rush to pharmaceutical products. Companies which operate here will want the right to advertise their products. I believe that the figure of 10 per cent., which is what the companies are allowed for advertising their products, is too much. General practitioners could not open their front doors 30 years ago because of the number of advertisements that had fallen through the letter box. Companies are now more sophisticated in their approach. They offer free luncheons and rides on the Orient express.
Recently in Liverpool a company advertised a visit to the Henry Ford yacht, a masterpiece of 1930s luxury. It was an Italian company which was operating in this country and seeking to attract the attention of British doctors. It sent out a leaflet which described the size, the shape, the carpeting and decor of the yacht, but said nothing about the drug and barely mentioned its trade name, although of course it did mention the name, because that is the rationale of all the advertisements. There is a good case for telling the companies that they must spend far less money and certainly have no justification for producing magazines and offering railway jaunts and dinners to groups of doctors. That is one way in which companies seek to push their products.
If a company has useful clinical information to pass to the medical profession, it should not need to use such methods. One should say to the companies, "If you are dealing with the medical profession and have information which is of use to it in its job, surely you are prepared to


behave in a dignified and sensible way and not seek to bribe it with the easy handout," and I believe rather degrading and constant hospitality.
There is a good case for much tighter controls of the pharmaceutical industry. I hope that we shall have a chance to talk about some other aspects of its behaviour tonight, and that when the Minister replies he will give us one or two simple answers to the questions that my right hon. Friend the Member for Stoke-on-Trent, South has asked. They were important and on a subject that has a direct effect upon the lives of many people in this country.

The Minister for Health (Mr. Kenneth Clarke): I congratulate the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) on winning time for a debate on this important subject. I agree with him and other hon. Members who have spoken that the history of the use of Opren in this country is tragic, particularly for some of the patients who were treated with the drug and for their families and friends.
We shall probably never know the exact number of people who suffered serious injury, side effects or death as a result of the use of the drug, because precise causation is often difficult to establish and one does not know the full extent of the notification that was received. Possibly some of the deaths that were suspected of being linked with adverse reactions to the drug were not actually caused by the use of the drug and perhaps the patient died of some other condition. Nor do we know to what extent we received full notification of all the side effects, or whether doctors recognised that the patient was suffering from a side effect of the drug.
An unacceptable amount of suffering from the side effects of the draug was caused. We all express our sympathy, and in some cases, unfortunately, our condolences, to those people who feel that they were the victims of a tragedy.
I began by saying that the history of Opren was a tragedy. However, I believe that it was not a scandal. I hope to be able to persuade the House of that. It is quite untrue for the right hon. Member for Stoke-on-Trent, South to say that Ministers at the DHSS have been holding back information or have not been forthcoming about Opren's history. I shall be forthcoming this evening and give as full and detailed history of the introduction and use of the drug as I can. It is an advantage that I shall not be edited by television producers or be subject to some of the other misfortunes that those who try to explain their position inevitably experience in this kind of case. I am grateful to the hon. Member for Crewe (Mrs. Dunwoody) for saying that she did not lend her weight, as official Opposition spokesman, to some of the strong attacks made on the Committee on Safety of Medicines and its members.
The House should recognise the committee's great work on behalf of the community. Professor Goldberg and his distinguished colleagues put a great deal of untiring effort into their work. We are fortunate in having genuinely leading experts giving their services to the committee, and irresponsible attacks upon them may deter some of them from giving up several days each month from other valuable professional work. The extent of their

duties is considerable. The committee licenses about 200 drugs each year, and it monitors the safety of about 16,000 products currently in use.
The number of products that give rise to difficulty is trivial. There is the occasional spectacular, well-publicised case, but that does not provide the basis for attacking the integrity and the good work of the committee, or, as I hope to demonstrate, the system itself.
Britain has one of the most effective monitoring systems in the developed world. I am satisfied that the committee monitored the drug Opren throughout its history and advised action on occasions when it had the scientific evidence to justify doing so. I understand the anxiety that we all feel, with the benefit of hindsight, about the adverse reactions that were experienced. But much of the strident criticism that is now being aimed at the committee and our system of monitoring is based heavily on the wisdon of hindsight. Some people are searching for scapegoats and some of the critics fail to understand either the scientific background or the sequence of events.
Before leaving the subject of the Committee on Safety of Medicines, I want to deal with the right hon. Gentleman's suggestion that the committee lacks the resources to carry out its tasks successfully. People have made completely uninformed attacks suggesting that the CSM was suffering from Government cuts in expenditure, was not vetting the yellow cards sufficiently quickly and other populist nonsense. None of this was promulgated by hon. Members in the Chamber, but there is one notable absentee who made several of those points.
The resources of the CSM have risen during the period that the Government have been in office, as has its gross expenditure, from £l·1 million to £1·2 million. In addition to this central expenditure, the committee has the valuable resource of all doctors throughout the country co-operating in our notification system, which is usually referred to as the yellow card system. I am quite satisfied that the committee has adequate resources to fulfil its task of considering applications, which is why it has been so successful in the case of most new drugs brought into Britain.
When the right hon. Gentleman compared the committee's expenditure with the total expenditure on all research and development of all drugs in Britain by pharmaceutical industries, he was not comparing like with like. We have no reason to believe that the £1·2 million and the number of pharmacists are not adequate to fulfil the task.
In case anyone thinks that my thanks to and praise of the CSM show that I am wholly in its pocket, and an uncritical Minister monitoring its activities, I must tell the House that I have discovered that I am the first Minister for Health who has not followed its advice. In one recent case I refused a licence to a drug known as Depro Provera, contrary to the committee's advice. A hearing is being organised to produce further information on that drug and its side effects. The Government are not wholly uncritical—they exercise their judgment in all cases.
Having dealt with the system and its record, may I say that there is an important general principle to be made about the marketing of any new drug. It is never possible, and will never be possible, to produce and market a new drug that is 100 per cent. safe. The right hon. Gentleman regards that remark as a platitude. He expected that I would say that, but it is not a platitude. That truth is not widely enough appreciated by the general public.
My hon. Friend the Member for Harborough (Mr. Farr) reacted on the basis that, because he had suffered unpleasant side effects from the photosensitivity of his skin caused by a drug, that proved that it must be wrong that, in a civilised developed country, it is possible to market a drug that produces side effects. I am afraid that, given the nature of drugs and drug therapy, it is not possible to market drugs without side effects. All products, without exception, cause adverse side effects in some patients. I recall something that the late Sir Derek Dunlop said. He played a great part in setting up the CSM. He said something like, "Show me a drug that has no side effects and I will show you an inactive drug." The Times' leader put it more dramatically by saying that all drugs were poisonous. To some extent, that is true. They are introduced into the system to produce a chemical reaction which, on balance, has beneficial effects. It is a controlled toxicity in the drug that produces a cure or relief from the symptoms being suffered.
The judgment that must be made about every drug that is developed, given that all drugs have adverse side effects, is complex and difficult in every case. We must decide whether the benefit of the drug is greater than the risk of adverse reactions. The benefit depends on how effective the drug is, how serious the disease or condition being treated is, and what the consequences will be if the condition is left untreated. With adverse effects, we must understand the nature, the extent, the number and the frequency and how far the effects can be reversed in the patients who suffer them. The balance between advantages and disadvantages can vary according to how serious the disease is, how effective the treatment is and how great the risk is to the patient.
One extreme example is that a drug that may be used to treat a terminally ill cancer patient can acceptably have frequent and serious side effects because the relief it gives justifies running the risk of some rather unpleasant side effects.
There are common drugs in everyday use that are known to have adverse side effects on some patients.

Mr. Laurie Pavitt: Paracetamol.

Mr. Clarke: That is an accurate example. Aspirin can cause internal bleeding in a proportion of those who take it. It affects only a minority, but the risk is acceptable because the drug is useful. It is sold over chemists' counters without a prescription. Seasickness pills can cause drowsiness, and it is dangerous to drive after taking them. Penicillin can cause a nasty adverse reaction in a minority of people unlucky enough to be sensitive to it. It is well known that the contraceptive pill carries the risk of thrombosis in some women. All those risks are known to have been experienced by patients, but each of the drugs has been judged to be acceptable because the risk is so small when compared to its benefits for the community.
Every time a new drug is submitted by a company, a judgment must be made about its side effects. If it is wholly free of side effects, it is probably useless and will not do any good, but, whatever side effects it causes, these must be balanced against the benefits that it will bring, to see whether its use is acceptable and desirable.

Mrs. Dunwoody: Does the Minister accept that he is making a valid case for much better reporting of the use

of new drugs? If people take new drugs there must be close monitoring. Is there not a role for the pharmacists as well as the doctors?

Mr. Clarke: There is validity in both those points. I shall be explaining the system of reporting, and I was interested in what the hon. Lady said about the role of the pharmacist. In judging the monitoring system, and the licensing system of testing, my point is that it is a difficult judgment to make between the benefits and disadvantages, and I am sure the hon. Lady accepts that.
In looking at the advantage-disadvantage balance on Opren, let us not forget another feature of the drug when it was in use. It was a very effective drug in the treatment of arthritis and osteoarthritis. It did not cure the disease, but for some patients it had very beneficial effects in relieving the symptoms and improving the quality of life.
Opren belongs to the class of drugs known as non-steroidal anti-inflammatory drugs. It was about the twentieth of that kind to go on the market. Many patients who tried other variants of the drug found that it was in practice far more effective in reducing symptoms than others.
Somebody who worked in my constituency told me that in practice it was found to be good for relieving suffering from psoriasis, because the very effect that it had of reducing photosensitivity in some patients was helpful in treating psoriasis. All hon. Members who take an interest in the subject, and I would guess the right hon. Member for Stoke-on-Trent, South himself, found that, when Opren was withdrawn, they had many complaints from patients who objected to the withdrawal of the licence from a drug that had greatly increased the quality of their life. They had been crippled and disabled from arthritis and obtained more relief from Opren than they otherwise could have obtained.
Other hon. Members may not have had this experience, but a young taker of Opren told me that the dramatic improvement in his condition that the drug had achieved in his opinion justified his carrying on taking the risks of possible side effects, which, in any event, he was not experiencing. If he stopped taking the drug there would be a deterioration in his condition and a relapse into pain and suffering. Opren was beneficial and was welcome while it was available to many patients.
Hon. Members have spoken about the amount of advertising, but one has to distinguish between advertising and the publicity that the media gave to Opren, with news stories describing it as a "wonder drug", when it first came on the market and gave relief. The right hon. Member for Stoke-on-Trent, South may have experienced this himself, because he sent a letter to my right hon. Friend the Secretary of State on 5 January which touched on this point. It set out his various complaints, which he has put forward today. Having given all the reasons why he felt that the drug should never have been licensed or should have been withdrawn quickly, he concluded one paragraph by saying:
Some doctors feel that Opren need not have been withdrawn if the CSM had responded promptly to warnings about dosage. If they are right, the CSM must accept responsibility for the possibly unnecessary withdrawal of a valuable drug.
I fear that I must accuse the right hon. Gentleman of trying to have it both ways by saying that the CSM is wrong both for withdrawing the drug and for withdrawing it when it could have been valuable if the dose had been reduced. It is worth remembering that this was a beneficial drug.

Mr. Pavitt: The Minister has referred to the promotion of Opren. What powers does he have on promotion? By coincidence, I have today sent the Minister a letter about another "wonder drug" for rheumatism. What powers does he have with regard to drug companies and new drugs in controlling their advertisements which may be claiming far more than is clinically possible?

Mr. Clarke: I shall deal with that point later. I agree that it is important, and other hon. Members have touched on it. I shall explain the legal position and the powers of the Department. The Department itself does not have powers, but the Association of British Pharmaceutical Industry and the British Medical Association have a role to play.
There is an allegation about the way that the committee dealt with Opren and the company. The committee has been charged with serious errors by the right hon. Member for Stoke-on-Trent South and by some outside who agree with him. There is a claim that the committee should not have licensed the drug on the evidence available to it in 1980.
Incidentally, I point out to my hon. Friend the Member for Harborough that we were the first country to license the drug, so talk about overseas experience is irrelevant.
Another charge against the CSM is that it was duped by inaccurate data from an unscrupulous company. The third general allegation is that the CSM should have acted earlier to withdraw the drug or limit its marketing when it began to receive reports of adverse reactions.
I shall deal first with the background to the drug, which is, as my hon. Friend the Member for Canterbury (Mr. Crouch) said, a lengthy one. In 1974 the Ministers who comprised the licensing authority sought the advice of the committee on an application by Lilly Industries Ltd. for a clinical trials certificate for the drug later known as Opren. This was to enable trials to take place on the drug as a treatment for rheumatoid arthritis. The drug had already been tested for toxicity in animals and the tests showed results similar to other drugs in this class, including effects on the liver and kidneys and gastro-intestinal tract. However, the toxic effect on the gastro-intestinal tract of Opren was less than from other such drugs.
The drug had also been given to healthy human volunteers in single dose studies. The committee took into account the advice of its expert sub-committees and recommended that the clinical trials should be approved, and this was accepted by the licensing authority. After 1974, the authority accepted seven and rejected one application for variations in the clinical trial certificates to cover other conditions. From 1974, therefore, clinical trials were steadily authorised.
In 1977, Lilly Industries applied for a product licence for Opren for relief of symptoms in rheumatoid arthritis and osteoarthritis. This application was passed by the licensing authority to the CSM for advice, following our system. The committee considered evidence from the company on 14 clinical studies undertaken in the United Kingdom in six hospitals and one general practice, in which 291 patients received the drug for periods ranging from six days to 12 months or more. The tests were carried out in what is known as double blind trials, in comparison with other anti-inflammatory and analgesic drugs and placebos. The committee also took into account the results

of similar tests in the United States, covering just over 200 patients in 38 different medical centres, for varying periods.
Having looked at that information, submitted with the licence application, the committee deferred its decision to obtain further information on adverse effects noted in a minority of patients. Adverse effects were always known to exist with the drug, in particular what is known as onycholysis, which is adverse reaction of the nails on the hands and the feet, and photosensitivity, which is increased skin sensitivity to sunlight. That was the adverse reaction that my hon. Friend the Member for Harborough had the unpleasant experience of suffering when he later took the drug.
Those side effects emerged from the clinical trials sufficiently clearly for the committee to seek further clarification on the problems of drug safety. In February 1980, it considered further evidence from the company, which covered 330 patients in the United Kingdom and 1,681 patients in the United States, Canada and Mexico. Of these patients, 620 had taken Opren for more than a year and 39 had taken it for more than two years. The committee noted that the incidence and severity of photosensitivity and onycholysis varied widely at the various centres where the trials were held. On average, some photosensitivity had been reported in nine per cent. of American patients and 3·6 per cent. of United Kingdom patients, and onycholysis in 8·7 per cent. of American patients and 1·2 per cent. of United Kingdom patients.
The committee also took into account evidence of the efficacy of the drug in the treatment of the conditions of rheumatoid arthritis and osteoarthritis. It concluded that the drug should be granted a licence. This advice was accepted by the licensing authority and a licence was granted in March 1980 for its use as a prescription-only medicine. The licence and its product particulars included data on the product approved by the committee, covering contra-indications and precautions and warnings of possible side effects. Our system involves—in this case as in all others—all practitioners being given a copy of the data sheet incorporating this information from the licence. All doctors received a copy of the data sheet including special information about the use of the drug in patients with impaired liver or kidney function and indications about possible side effects, including gastro-intestinal bleeding, photosensitivity and onycholysis. The product was supplied to hospitals from May 1980 and to general practitioners from October 1980.
I have given a full description of the clinical trials and the evidence that was obtained. That was the evidence and the position on this drug when our Committee on Safety of Medicines gave advice which was accepted to give a product licence to this drug. We were the first country to give a licence. That was the full extent of the information then available. I know of nothing to suggest that any other information was available at the time but was withheld from the committee. In the light of knowledge and information available at that time the House, I think, should judge that the committee was right in giving the advice that it did, coupled with the data sheet, incorporating warnings, that was provided. To a layman, the warnings sound quite serious. They were warnings about gastro-intestinal bleeding. But drugs of this sort, including aspirin, will cause gastro-intestinal bleeding in some people.
That was not the most serious problem. Photosensitivity and onycholysis sound bad but in most patients the effects were not severe. There turned out to be a wide range in the level of severity. Some of the increased sensitivity to sunlight involved no more than the patient becoming lobstered. There were far more extreme examples in some cases. My hon. Friend the Member for Harborough obviously had an unpleasant experience. In many cases, however, the photosensitivity and the damaged nails were not too serious. With the data sheets giving a warning, it was thought right to continue to monitor the problem.
Various points have been made about the data available to the committee when licensing a product. There has been mention of clinical trials being conducted specifically on the elderly. With hindsight, the history of this drug shows that it was among the elderly that the casualties and the worst experiences arose. It is, however, a sensible proposal. Often, when drugs are tested on younger and fitter patients, they later give rise to more serious problems among the elderly and the frail.
Even then, this apparently sensible proposal raises difficult scientific issues, not least because the testing of products on the elderly makes it more difficult to sort out cause and effect. Elderly patients, on average, tend to have weaker kidneys and livers. They tend to die of and suffer from other conditions. It is difficult to conduct clinical trials on the elderly from which one can draw exact conclusions. The Committee on Safety of Medicines is currently considering the problems involved. The Government are consulting the industry and those concerned on the point. The right hon. Member for Stoke-on-Trent, South has made a point of some value for the future.
The right hon. Gentleman asked about the confidential-ity of the data submitted to the licensing authority by a drug company in support of a product licence application. He says that we have not been as forthcoming as we might have been and that more detailed data should have been issued. The information that we get is the company's property. We have to accept that there can be legitimate arguments of commercial confidentiality when a company submits details of its clinical trials. Companies will not want to disclose results of work already done if it becomes immediately available to competitors.
My hon. Friend the Member for Canterbury said that the successful development of drugs, with the profits produced, provides the finance for further research and development. If commercial confidentiality is breached, the risks are great that someone will steal the product. If the Government were to insist on total disclosure, I can foresee the first Adjournment debate when an hon. Member would be saying on behalf of a British pharmaceutical company that our crazy system of disclosing clinical data had enabled a foreign company to steal a great British breakthrough in the development of a new drug. We have to be careful about disclosing all the data.
Much of the information is very technical. Disclosure of data showing apparent problems and harmful effects on animals is likely to give rise to unnecessary alarm among the more gullible readers of some of our more popular and sensational newspapers whenever a new drug is produced.
Many hon. Members have expressed concern about the monitoring of Opren after licensing. What went wrong, if anything went wrong—if I am right in saying that the

licensing decision was correct taken in the light of the data I have described—in monitoring Opren after licensing? It is argued that the Committee on Safety of Medicines failed to act quickly enough in response to further information about Opren as it became available. I shall be dealing later with the mechanics of monitoring. The yellow card system has been much criticised. In this case, it succeeded at an early stage in identifying Opren as a particular problem.
In the first 12 months after marketing, the committee received an unprecedented number of adverse reaction reports. About 2,000 had been submitted by doctors by August 1981. That is a large number. Of those, however, nearly 1,500 related purely to reaction of the skin and nails. These were predictable from the clinical trials. In particular, the skin reactions were not generally serious and stopped if the patient ceased taking the drug or used a sun-screen.
My hon. Friend the Member for Harborough said that he gained relief by going indoors and staying out of the sunlight. His complaint was that the cause of the problem was not detected quickly enough and he had no warning. However, quite a number of patients were gaining such relief from the drug that they took the advice to use sunscreens and to stay out of sunlight which meant that the adverse reactions were not serious. The company agreed to send doctors further information on the skin reactions so that more could be done to pick up the reasons why patients were suffering unpleasant side effects.
More seriously, by August 1981, nearly 200 of the reports related to gastro-intestinal problems mainly in the elderly. This is a side effect common to all drugs in this class, including aspirin. However, the number of reports was worrying. The result was that, following discussions with the company in August 1981, the company provided the Committee on Safety of Medicines with studies of the handling of the drug by elderly patients which the company thought might be the cause of the gastro-intestinal problem.
I mention this because the fact that the Committee on Safety of Medicines had not stepped in, in the autumn of 1981, is criticised. To get the time scale right, it is worth noting that West Germany, which has a vigorous system of drug control, licensed the product in February 1981. Denmark, not a backward country, licensed the product in July 1981. The British had licensed it first. No one else was picking up the things it is now claimed should have been picked up if only the matter had been properly examined in this country.
A key point in the allegations of the right hon. Member for Stoke-on-Trent, South and of the press is that the committee should have recommended action against Opren in October 1981 when a study made by a Dr. Hamdy was presented to it by the company, showing accumulation of the drug in elderly patients. Dr. Hamdy had given a paper on the subject at a seminar organised by the company in Paris in June 1981. The right hon. Gentleman is mistaken in saying that it was published in July 1981. It was in fact, given at a seminar.
The committee was in regular contact with Lilly at that time, although Lilly is criticised by some for not handing over the report by Dr. Hamdy. In July 1981 officials were meeting Lilly to discuss skin reactions and reports of gastro-intestinal bleeds in some patients. There is no record of any reference to accumulation in the elderly.
In August, officials again met Lilly. The company suggested that it had studies on accumulation that


explained the gastro-intestinal bleeding. Later in August, Lilly discussed the company's warning letter to doctors about skin reactions. Then on 7 October 1981 Lilly handed to officials three drug accumulation studies which included Dr. Hamdy's. That is the narrative. There was no delay.
One thing to notice is that they were still discussing skin sensitivity, which never became serious. If that was the only problem, we would still be licensing it. Gastro-intestinal bleeding was the subject of the discussions, which did not turn out to be a serious problem either. The three studies, still not published, were handed in October 1981.
The three studies did not all come to the same conclusion. A study was carried out in London by Dr. Hamdy. There was a study on similar lines by Dr. Kamal and Dr. Koch and a preliminary report on a study on patients in Basingstoke and in Indianapolis, in the United States of America. The studies suggested that the drug might accumulate in elderly people but the evidence from Basingstoke and Indianapolis was conflicting.
The key point is that the studies did not contain any specific evidence that the drug was harmful. What they were concerned with was the time that it remained in the body of the elderly person and the various effects this could have. This is the key point because the press and others are making a great deal of the report from Dr. Hamdy showing that the drug was dangerous and should have been acted on. Dr. Hamdy's report was published much later in 1982 in the European Journal of Rheumatology and Inflammation.
The last paragraph of the summary of Dr. Hamdy's technical paper states:
It is concluded that the high plasma benoxaprofen levels achieved, combined with the slow clearance rates and long half-lives, indicate that it may be possible to administer benoxaprofen"—
which is Opren—
less frequently, or at lower doses, to elderly patients. More work is needed to determine whether this prolonged half-life is matched by an equally prolonged therapeutic effect.
Dr. Hamdy was referring to the prospects of giving elderly patients smaller doses and still getting the beneficial effects.
That report, presented with other conflicting ones, at a time when the Committee on Safety of Medicines was discussing with Lilly the prospects of gastro-intestinal bleeding, which did not turn out later to be the key problem, is relied upon by some of these clever fellows in the newspapers. They are saying what a dreadful committee we have in Britain and how it failed to act, and how advice should have been given to withdraw the drug at that stage. The politest thing one can say is that that is the wisdom of hindsight by people who are not trained to know better in that area.
In October 1981, on the basis of the data available at the time on Opren, there was no significant evidence of the real problem—the one that led to its withdrawal—of reactions in the liver and the kidneys, particularly in elderly patients. Taking this into account, and the safety record of similar drugs, it appears to me that the Committee on Safety of Medicines acted in October 1981 as it must always act—rationally, based on the scientific data that were then available.
I must move on quickly—although I do not apologise for taking up time because I was accused earlier of being one of those Ministers who withheld the details about this saga from the House.
The final act in the Opren tragedy occurred in May 1982. At that time, when the Americans were licensing the drug—a passing reference to the Food and Drugs Administration, which has been praised in comparison to our own by some critics of the Opren story—Dr. Taggart of Belfast published his reports of deaths from jaundice in five patients over the age of 80 who had been receiving Opren.
By that time the yellow card system was beginning to suggest that there could be a serious problem of adverse reactions in the elderly affecting the kidneys and the liver. Nevertheless, the yellow card system did not confirm that Opren was significantly more toxic than similar drugs. In his key work, Dr. Taggart was fortunate, or unfortunate, enough to have the coincidence of having five patients who had all been taking Opren in the same way dying in a similar way shortly after each other. This illustrates the difficulty of determining cause and effect because the difficulty with elderly patients over the age of 80—a sad fact of life—is that they tend to die anyway of other causes. It is when a number of them die together, in similar ways, and they all happen to have been taking the same drug that a doctor can form a conclusion.
I think that Dr. Taggart had been sending in his cards of individual cases, but it took him several months to work out the connection or possible connection between these deaths. In fact, it was when he published his report in May 1982 that the floodgates of notifications opened. Other doctors then began to recognise the symptoms and were able to make the same connection. The committee, being concerned, recommended a halving of doses in the over-65s, pending further evidence. The evidence came in quickly through the much-mentioned yellow cards and by late July was reasonably conclusive, and the licence was suspended. I asked the committee to review the licence, but by early August it was withdrawn. The company voluntarily first withdrew all stocks of the drug from pharmacists and finally, a month later, cancelled their licences.
Looking back, I think it can be seen that the CSM's monitoring of adverse reactions throughout the two years the drug was on the market identified a number of serious side effects arising from Opren. It continually reassessed the risk-benefit ratio of the drug in the light of that evidence until eventually the safety problems seemed to outweigh any possible benefit and it was immediately taken off the market. I simply do not accept—that narrative will have to be examined by the House and the public—that there was any avoidable delay in detecting and acting on the evidence on Opren.
Indeed, premature action on drugs can cause different problems. The suspension or revocation of a licence for a drug, which many people still believe is doing a great deal of good, on a mixture of inadequate or incomplete data or on some sort of hunch can cause only unnecessary alarm and worry to patients and sometimes deprive the community of useful drugs. If suspicions about a drug were later to be groundless, I am sure that the committee and everyone else would face publicity suggesting that we deprived the community of a valuable drug by acting on inadequate data.
Attacks have been made on the company. The right hon. Member for Stoke-on-Trent, South said that the company has been attacked in America for giving misleading information. I should like to deal with the allegations against Lilly Industries Ltd.
First, it is said that it should have been noticed that Lilly Industries Ltd. was under attack in America. One must get the timetable straight on that allegation. The allegations made against Lilly Industries Ltd. in America about its failure to disclose to the FDA arose only after the Committee on Safety of Medicines had licensed the drug on its product application in 1980. More important, we and the committee are quite satisfied—and the evidence I have given supports that conclusion—that nothing was withheld from the CSM by the United Kingdom subsidiary.
The allegations made against the parent company in America have been the other way round compared with those which have been made in the debate. It appears to be alleged that the United Kingdom company did not pass over information promptly enough to the United States parent company on adverse reactions. However, the investigations in Congress came to no conclusion about that allegation. I am in no position—nor is anyone else in the United Kingdom—to pass judgment on incidents in the United States when no definite conclusion has been reached following investigations in Congress. I must again emphasise that we have no complaint against Lilly (UK). We have no evidence to suggest that anything was withheld from ourselves or the Committee in the course of the product application.
A great deal has been said about the monitoring system after the introduction of the drug. In this debate no one has laboured the arguments that were advanced earlier about the yellow cards being out of date or cuts in expenditure and other entirely inaccurate attacks. In monitoring the side effects of drugs we rely to a large extent on notifications by doctors, which are put on cards, and on studying literature. The hon. Member for Crewe has said that this is not adequate. The doctors who prescribe the drug and give it to patients are in the best position to notify. Our system of notification is more developed than that in any other country and was reasonably effective in picking up the data required in the Opren case. If I may say so, I entirely agree with the constructive suggestion made by the hon. Member for Crewe about pharmacists. The Committee on Safety of Medicines is actively considering the possibility of accepting reports from pharmacists on adverse reactions to add to the data that we receive from doctors.
Improvements can be made to the yellow card system. For example, it can be computerised and we can speed up the handling of the data. There were no significant delays in dealing with Opren, although I accept that there were delays in dealing with other drugs at one point because of the flood of cards that came in. However, nothing occurred on that front which had an effect on the decisions or the timetable at any stage.
Monitoring adverse effects does not really depend on the colour of the form or the type of form on which the doctor notifies. It does not depend either on the filing system or the way in which the forms are handled in the office. The problem of monitoring drugs is well illustrated by the history of Opren. The difficulties that have arisen in the cases in which the right hon. Member for Stoke-on-Trent, South has taken such an interest are those which tend to arise when the right connection has not been made

quickly enough between the drug and unexpected symptoms in a particular category of patients. It is easy with hindsight to say that the connection should have been made but it is exceedingly difficult to make it and to draw the link.
Patients often suffer from a multiplicity of conditions and the relevant symptoms could be caused by many factors. It takes some time before anyone is put on guard. A great deal has to be done in monitoring the literature. It is necessary to await publication in journals of theories or beliefs held by doctors who have noticed some connection while dealing with their patients. A link that is suggested in an article that appears in a journal enables general practitioners to make the link with their patients in a case which has previously been puzzling or baffling them. It was the publication by Taggart of his article in the British Medical Journal, after he had spent months deciding whether he had something worth publishing himself, which led suddenly to the connection being made throughout the country. It was only two or three months before the product was off the market and detection had been made.
My hon. Friend the Member for Canterbury has cited the Soviet Union's record on research and development. Given the record of innovation of our drug industry and our success in keeping disasters of this sort to the minimum, I do not believe that considerable sponsoring of research work in universities or employing pharmacists ourselves will produce any great substitute for the present system. Problems will occur and they will be detected at ground level. We are not complacent about the system; it must be improved. Some variants are needed.
Although it can be improved, our yellow card system is unequalled in most western European countries, in the United States and in Japan. We are not complacent and the Committee on Safety of Medicines has established a working party under the chairmanship of Professor Graham Smith to consider proposals for improving the present system. I shall consider carefully any recommendations that the committee may make in the light of the report. I shall also consider carefully any suggestions that are submitted by hon. Members.

Mrs. Dunwoody: I am happy to have that undertaking. It is a positive move. I have listened carefully to the Minister. Has he not been proving clearly throughout the saga of events that Dr. Taggart's evidence was the first entirely independent submission to be published? Was he not right in saying that the company had certain indications? I accept that the doctor who undertook the study drew the wrong conclusion, but is the Minister not really saying that Lilly sat on certain available research for some months because it had drawn entirely different conclusions? Has the Minister not made the case conclusive for independent clinical investigation? Surely this is what is wrong. The Committee on Safety of Medicines has to rely on the company for so much of its evidence that these difficulties inevitably occur.

Mr. Clarke: The independent element is the reporting carried out by medical practitioners and the publications in the journals, which can be submitted by anyone who believes that he detects in practice a clinical relationship between the drug and the product. Dr. Hamdy cannot always be described as independent because he presented his findings at a seminar that was organised by the


company. On the other hand, it is rather difficult to attack the company for using Dr. Hamdy's report when he was not independent. It was the company which sponsored the production and publication of the report which is now said to condemn it. I have given the narrative of contact with the Government.
We know that Dr. Hamdy's report did not refer to deaths from jaundiced livers and kidneys. The discussions that were going on with the company and the Government were all about internal bleeding and photosensitivity. When the company finally produced Dr. Hamdy's report it was with two other reports. There was no reason why it should keep back any other reports. As I have said, the reports were inconsistent. I do not think that all the conclusions can be drawn that the hon. Lady suggested, but I shall reflect on her arguments.
Advertising has nothing to do with the Committee on Safety of Medicines, it being the joint responsibility of the Department and the industry. At no time did the Department receive any complaint about the advertising of Opren. There is some wisdom in considering the advertising campaign with hindsight. Complaints were made, and properly so, and were directed to the Association of British Pharmaceutical Industry. Successive Governments have relied on the restraining influence of the voluntary code of practice that is run by the association. Very few cases give rise to concern or to complaints but I am sure that the association is as anxious as the Government to ensure that excesses are not committed, that advertisements are not misleading and that promotion does not go too far.

Mr. Crouch: rose—

Mr. Clarke: I agree that occasionally one finds excesses in the promotion of drugs. Most hon. Members react on occasions to the heavy over-promotion of drugs. However, one must remember that some of the promotion takes place abroad. Therefore, an Italian company that offers places on a yacht in the Mediterranean is—

Mrs. Dunwoody: On Merseyside.

Mr. Clarke: With my old hat on, I am glad to hear of a boat putting into the Mersey Docks and Harbour Company. It is extremely difficult to control the promotional activities of an Italian company. Nevertheless, advertising can be controlled, but the judgments are not so much about advertising as about taste.
As my hon. Friend the Member for Canterbury said, if an organisation believes that it has a great breakthrough and has got in in advance of other drugs in the same market, it cannot be criticised for spreading information of those advantages widely and trying to bring them to the notice of GPs quickly and dramatically. The ABPI and the voluntary code of conduct attempt to cope with the lack of taste and judgment that is occasionally shown by companies that go too far.

Mr. Crouch: In a debate such as this, there is a great deal of interest outside in what my hon. and learned Friend the Minister says. When he mentions an emotive word such as "advertising", will he stress that, whereas it might be thought that drugs can be advertised to the public, it is not possible? That is not allowed. The only advertising is the giving of information to the medical profession.

Mr. Clarke: I agree with my hon. Friend. Moreover, active advertising is subject to the law that governs all advertising.
It is also important to remember that advertising and promotion sometimes has news value. Often, the best advertisement that drugs obtain is from reports on television and in newspapers. It is extremely difficult to control that. For example, I am told that one of the episodes of the "Panorama" programme which attacked Opren and its history was followed the next night by another programme that announced a new wonder drug that cures arthritis. Such drugs are vigorously promoted with exotic news stories by the same sections of the media that will all too often rapidly condemn the side effects of the same new drug when that is the story a year or two later.

Mr. Pavitt: At the moment, 6 million journals are sent out annually to pharmacists. The British Medical Association's complaint has been that advertising tends to be more and more commercial and less and less to do with information. Will the Minister consider strengthening the monitoring code of practice? Will he consult the Association of British Pharmaceutical Industry in banning the use of the words "new", "unique" and "wonder drug" from promotional material?

Mr. Clarke: The House should accept that the ABPI is as anxious as the Government and the House to act against legitimate complaints. It must also be borne in mind that the advertising is aimed at doctors, who are a comparatively sophisticated audience. An advertisement's straightforward description of a product as a wonder drug might not cut much ice with a GP. "Wonder drug" is typical of the type of phrase that is used in newspaper reports to describe the latest research work that has been found in the United States.
Moreover, doctors are sophisticated customers. A doctor's main concern, irrespective of whether he has been taken on the Orient express to Venice, is to find the right drug for his patient. Few doctors—I hope none—knowingly prescribe an inferior product. The doctor who chooses to prescribe a highly promoted drug rather than an equally efficacious alternative is still looking after his patients' best interests. If he had no faith in the product, he would not prescribe it.

Mrs. Dunwoody: The Minister is not a naive man—he is not even a simple one. He knows that the central purpose of all the nonsense that is sent out to doctors is to drive home the trade name. It is intended to drive home a name that is picked because it is simple. The material is intended to drum in awareness of a product that would otherwise have a long Latin name. The Minister knows the purpose of the publicity. It is to ensure that when a doctor writes a prescription, he writes in the word that is quick, simple and easy to remember. That has nothing to do with his estimation of how useful the drug is.

Mr. Clarke: I accept the hon. Lady's description of part of the purpose of advertising. Nevertheless, the fact remains that, for example, a consultant rheumatologist will prescribe a drug that he believes is most efficacious for this patient. He will not be swept away by the type of promotion that might lead a less educated person to use a domestic product.
The ABPI deals with complaints and is as anxious as we are to ensure that the lapses in taste which occasionally occur are checked so far as possible.
Clinical trials that are conducted by GPs have also been attacked. It has been suggested that some of those clinical trials—not the ones that are conducted by the CSM—have no meaningful element of research or fact finding and amount to no more than blatant advertising. We have given ministerial undertakings to put those trials on a respectable basis through a code of practice that is administered by the industry. Several drafts have been prepared by the ABPI in consultation with the BMA and the Royal College of General Practitioners. The Department has made many suggestions and amendments to those drafts and general agreement has now been obtained on most points.
The code of practice will contain provision for approval of an independent and properly constituted ethical committee. Arrangements will be set out for medical approval of the trial protocol and will deal with patient selection and patient consent. My Department still has to clear up with the medical and pharmaceutical professions some aspects of the supply of medicines to patients for the purpose of the trials and remuneration to doctors for their administrative tasks. I give that as an illustration of an area that has come under considerable question recently, where we are acting together with the two professions and the ABPI to draw up a sensible code of practice to stop excesses.
I hope that everyone concerned—the industry, the Committee on Safety of Medicines and the medical profession—will accept that there are some valuable lessons to be learned from the Opren tragedy. As I have explained, I do not believe that in the real world we can ever be certain of avoiding such problems. It is inevitable that, unfortunately, whatever improvements we effect in

our system, there will be other problems in years to come. It is almost certain that there will be another such incident sooner or later.
However, with the help of the Committee on Safety of Medicines and other advisory bodies, we can minimise the chances of such an incident occurring once more. That is the tragic, but comparatively small, price we pay for products that are improving the quality of life, as my hon. Friend the Member for Canterbury said. When one looks objectively at the advantages and disadvantages of the development of new drugs, one realises that it is a price that we must be prepared to pay for the greater benefit of all. Otherwise, the great improvements in the quality of life that many drug products bring would not be enjoyed either at all or as quickly as they are.
For example, the alternative course would be to refuse to license new drugs in this country. If anyone demands 100 per cent. certainty, the only way to do so is to refuse to license new drugs until they have been used on hundreds of thousands of patients in other advanced countries. That would achieve greater safety, but British people would be deprived of the value of those drugs for many years, with the consequential toll of misery and possibly deaths from the disease and conditions that remained untreated.
Our policy is based on confidence in the expertise of the Committee on Safety of Medicines and the controls imposed by the licensing system, plus a constant effort to improve it and to learn from experience. Most of those who are experienced and who practise in this field, particularly the vast majority of the medical profession and its well-informed patients, will agree with the policy that we follow and the balance that is struck in trying to achieve the highest safety for new drugs when they are introduced.

Mr. Ashley: I warmly welcome the working party that is looking into improvements and the change in attitudes to clinical trials for the elderly. However, sufficient resources are still not being allocated to drug safety. I shall continue to press the Minister on that in future.

Orders of the Day — Drugs (Promotion)

Mr. William Hamilton: The debate that I am about to initiate is, by coincidence, closely related to the one that has just ended.
As the House will know, our Public Accounts Committee works with the advice and guidance of the Comptroller and Auditor General and his staff of about 800. We are debating that matter tomorrow. I hope that we shall overturn the Government's attempt to deprive the House of powers that it wants back over the control of public expenditure. The CAG and his staff present reports to the House and the Public Accounts Committee on matters pertaining to the expenditure incurred by the various Government Departments. Those reports are known as Appropriation Accounts. They are not as dry as my description might imply. The CAG reports on those accounts and the Public Accounts Committee investigation is based on those accounts.

Mr. David Crouch: I would be grateful if the hon. Gentleman would let me know what he is talking about. Normally, the Order Paper contains advice on the title of the subject that an hon. Member seeks to raise on the Adjournment. I understand that the hon. Gentleman's subject has not been notified in writing because of the time factor.

Mr. Hamilton: In the next two minutes, it will be abundantly clear what I am talking about. Yesterday, the PAC took oral evidence from the Department of Health and Social Security and the Scottish Office on the subject of drugs in the National Health Service; how the prices of those drugs are arranged between the Government and the drug companies; how those prices, profits and costs are controlled; and how effective those controls are. We also discussed transfer prices—the charges that a company makes when it passes goods to an affiliated company in the same national or multinational group—and various other matters that I will not bother the House with tonight.
We discussed the pharmaceutical price regulation scheme which is a voluntary system designed to ensure fair and reasonable drug prices in the Health Service, while at the same time enabling
an efficient and profitable pharmaceutical industry to be a major employer in the United Kingdom and to contribute substantially to the export trade".
The Comptroller describes the first objective of the PPRS as being:
To secure the availability of safe and effective medicines at fair and reasonable terms to the National Health Service".
We were told that 65 large and small companies operated within the purview of the PPRS.

Sir Michael Shaw: On a point of order, Mr. Deputy Speaker. I am a member of the Public Accounts Committee. The hon. Gentleman is seeking to discuss what went on in the Public Accounts Committee relating to matters that have not yet been terminated. Is it proper, and would it not be an undesirable precedent, if the hon. Gentleman were to seek to skirt round the subject of the discussions and investigations with which the Public Accounts Committee is at present concerned?

Mr. Deputy Speaker (Mr. Ernest Armstrong): The evidence was reported to the House yesterday, so the hon. Gentleman is not out of order.

Mr. Hamilton: I am surprised at the hon. Gentleman's naivete and ignorance. The press was there in scores listening to every word that I am about to say. The hon. Gentleman will be glad to know that I shall not divulge anything that we were told in our confidential session. Everything I am now saying was heard by the press and was reported in the newspapers this morning. That was a contemptible but typical intervention.
We took evidence of a confidential nature, which I shall not divulge, about 65 large and small companies. It is clear that this is a large and lucrative business. The figures are contained in the Comptroller and Auditoror General's report for 1979–80. The DHSS estimated that the value of the United Kingdom sale of prescription medicines by more than 60 of the larger manufacturers was £1,665 million, including profits of £252 million. That represented a return on costs of 17·8 per cent.
When the DHSS thinks that the profits of a company are excessive, price reductions may be agreed with that company or there may be profit rebates. However, the Comptroller and Audit General says in his report that very few profit rebates are made. The figures were given in a parliamentary answer to my hon. Friend the Member for Central, Ayrshire (Mr. Lambie) a few weeks ago.
The DHSS economists were unable to decide what constituted a reasonable profit; nor were they able to decide on the extent to which the amount of risk-taking incurred by the companies should be reflected in profit margins. Despite those reservations, the DHSS considered that
on the basis of the criteria agreed with the Treasury for the PPRS the pharmaceutical industry did not earn excessive profits".
That is said in paragraph 52 of the Comptroller and Auditor General's report.
Another part of the report deals with the overall effectiveness of the PPRS. According to the Department, that scheme is satisfactory and represents good value for money, although it was conceded that it had its limitations and was open to review and refinement. The committee was given many figures in confidence, and I have no intention of divulging them in public. In due course, the committee will decide what statistics and evidence will be published. That will be decided by us. However, the Comptroller and Auditor General questions the high level of profits and points to the uncertainties surrounding the efficiency of the drug industry generally.
Those facts were given to the press and the public. Any member of the public who cared to attend our meeting yesterday was able to listen to that evidence. Even if the public did not attend the meeting, they could read the evidence in the report that is available in the Vote Office. I was quite startled by some of the figures. No wonder that in this deepest of recessions very few drug companies are going into liquidation.
I shall quote from the Financial Times of 2 June 1982, which is a favourite newspaper of the hon. Member for Scarborough (Sir M. Shaw). An article on pharmaceutical firms was headed:
The pharmaceutical industry has passed through the recession almost unscathed. The world market for its products is now estimated to be around $90 billion and to be growing at six to eight per cent. a year.
The first sentence of the article reads:
At a time when so many major industries are still being torn apart on the rack of recession, the companies that originate and produce the world's key medicines have every reason to be confident about their current performance and prospects.


They can say that again.
In the earlier debate, the Minister was eager to make a fair point about which I have no complaint. He said that we must recognise that the costs of research and development in the drug industry are very high. It is a high-risk industry. In a capitalist society, such high-risk industries must obtain high profits to pay for the failures. A recent example of a drug failure was quoted in the same Financial Times article. The firm concerned was Fisons and the anti-allergy drug was Proxicranil, on which the company spent £12 million before finding that it was unsafe. Fisons had to write off that sum. However, Fisons makes extremely high profits from its drugs division so we need not shed too many tears for the company.
About 10 per cent. of the bill for our National Health Service is spent on drugs and, by and large, those drugs are supplied by the 65 companies to which I have referred, of which only 11 are United Kingdom firms. Those 11 firms account for nearly one-third of drugs sold in the United Kingdom, predominantly to the Health Service. American companies had a greater share of the United Kingdom market than that. I am not at all sure that our publicly owned and publicly controlled National Health Service is providing rich pickings for those American companies.
A closely related subject is the Greenfield report that was referred to in the evidence given yesterday. The report's full title is
The Report of an Informal Working Group on Effective Prescribing.
The Secretary of State has been sitting on that report for a very long time and we do not know why, although we can guess. What is the problem? Why should the report not be produced forthwith? Leaks in the press about the Greenfield report suggest that effective prescribing of drugs within the National Health Service could cut the drugs bill by £170 million a year. The leaks suggest that the cut could be achieved by discouraging doctors from prescribing expensive brand-name drugs, some of which have been mentioned earlier and, instead, prescribing much cheaper, and equally effective, generic equivalents.

Mr. Andrew F. Bennett: Is it not very odd that a Government who, in their election manifesto and in an early commitment from the Prime Minister, said that they would encourage open government should refuse to publish such a report so that there could be an informed debate before the Minister made his decision? They appear to wish to hide the report until it coincides with a Government announcement.

Mr. Hamilton: My hon. Friend has a good point. He might be interested to know that a few days ago I applied to HMSO for a copy of the report. I received a letter from the Stationery Office this morning, saying, first, that the Stationery Office will not publish it, secondly, that it will not even be placed in the Vote Office—

Mrs. Gwyneth Dunwoody: Shame.

Mr. Hamilton: —and, thirdly, that there will be a few copies available to hon. Members in the Library. That is absolutely outrageous. Every Member of Parliament and every member of the public should have the opportunity to read the report. Everyone is interested in the financing of the Health Service and the profits that are made out of it by American and other drug companies. It is an outrage that it should be allowed to go unchallenged. Moreover,

we do not know when it will be published. There were exchanges in the House a week last Tuesday about this when the Minister said that the first step was to publish the report. Of course, that is the first step; it is his responsibility to ensure that it is published forthwith. I understand that it may be published next week, but we shall have only a few copies in the Library for which hon. Members must scramble, and if it goes on to the book stalls the price will be phenomenal—like the Black report, at £8 a time. During the exchanges last week the Minister said that it must be published, that he must then have consultations with the pharmaceutical industry and the medical profession, and that he must make recommendations. What will the time scale be—one year, two years, three years or perhaps never? I hope that that answers my hon. Friend's point and I am glad that he intervened.
The prescribing of generic equivalents as against branded drugs would save the Health Service about £170 million, which is a considerable sum. Of course, the drug companies dispute that figure. As someone said in another context "They would, wouldn't they?" However, even the drugs firms concede that a saving of £50 million could be made if generic drugs were prescribed. That sum would be worth something to the Health Service, which is now in very straitened circumstances. Every penny will be acceptable to health authorities.
An article in The Guardian on 25 January stated that the NHS could save £29 million a year by substituting generic equivalents for only 11 branded products. That claim was made by Mr. Alan Smith, the chief executive of the Pharmaceutical Societies negotiating committee. The Greenfield committee said that £170 million could be saved over a much wider area. What is the Minister's estimated saving if there were a complete substitution of generic drugs for brand name drugs? An estimate must be available somewhere in the Department.
The drugs were all named by Mr. Smith, according to the article in The Guardian. Three of the 11 branded drugs were specifically mentioned. One is Flosint, an anti-arthritic drug, which is being introduced this very day to doctors in Liverpool. The makers, Farmitalia Carlo Erba—that does not sound British—have hired Henry Ford's yacht for the purpose. The Health Service will pay for that. The cost will be met by old age pensioners and increased prescription charges. The most outrageous bribery and corruption are practised on doctors by drug companies who try to persuade them to use these drugs. No doubt many of them resist for the very good reasons the Minister gave earlier; their professional conduct and independence would make them resist, but the pressures are remorseless. The cost eventually must be met out of the pocket of the British taxpayer.
To be fair, doctors said that the drug Flosint would cost £15 for 100 tablets, the dosage being one to three tablets a day, compared with £5·40 for the generic equivalent. If that were translated for every branded drug used in the hospital service one can see immediately that the savings would be enormous. Mr. Smith says that the Government encourage generic prescribing and that it now accounts for 22 per cent. of all prescriptions. I do not know whether that figure is accurate. Perhaps the Minister could confirm it.
The drug companies say that their research and development would be inhibited if they could riot get branded drugs imposed or inflicted on the Health Service. They maintain that they will not be able to do the amount of research and development that is essential. If the figure


of 22 per cent. is right for generic prescribing in the Health Service, what protests have been made about it by either the medical profession or by the public? According to Mr. Smith there has been none. The proportion in the United States is higher than 22 per cent. with no adverse effects on the activities of the drug industry. The only people who are protesting are the manufacturers of the expensive, profit-spinning branded drugs. If the Minister is encouraging the prescription practices advocated by Greenfield, I hope he will give short shrift to the drug companies who make representations in the opposite direction.
It is useful that we have had these two debates on health matters and the Health Service. No doubt during the forthcoming general election Health Service issues will be thrashed out by the public.
The Conservative party has sought, is seeking and will continue to seek to increase the private, profit-making element from laundering and catering to private profit-making hospitals and to capitalist drug peddlers from the United States, Italy and elsewhere. After the next election the Labour Government will rebuild the Health Service and, as the Prime Minister said when she was referring to the Falklands adventure, we shall do it whatever the cost. We shall show little sympathy for the privateers in whatever activity they may be in this wonderful Health Service of ours.

Mr. Michael Morris: Unlike the hon. Member for Fife, Central (Mr. Hamilton) I did not expect this subject to be debated this evening. It is perhaps fortunate that the Public Accounts Committee, of which I am a member, had a session yesterday on drug pricing. Before I go into that, let me say that the only reason that the NHS employs the private sector for laundering, catering, cleaning or any other work, is that the private sector does it better than the public sector. If the hon. Gentleman does not believe that he will presumably be making complaints to the Comptroller and Auditor General or the district auditor—whoever is relevant—and will have evidence to prove the contrary. [Interruption.] The hon. Member for Fife, Central has had a good go so perhaps he will quieten down for a second. I have looked at cleaning contracts in some detail and it is a fact that the cleaning of hospitals is done better and more cheaply by the private sector.
It is misleading for any hon. Member to quote figures without quoting the manufacturers' selling prices. If we are to challenge the drug companies it is the manufacturers' selling price, not the wholesale or the retail price, that is relevant to the drug companies. The figure that we should be dealing with for 1982 is the manufacturers' selling price of £1,200 million.
As the hon. Gentleman has said, drugs make up around 10 per cent. of NHS costs. It so happens that earlier this evening, before I knew that the debate would take place, I was reading an interesting article in the journal of the Office of Health Economics about a survey that was done—[Interruption.] I dare say that it is sponsored by the drug companies. I do not deny that at all. An interesting survey was conducted by an independent market research organisation on people's perceptions of what NHS medicines cost in relation to the total costs of the NHS. I

do not challenge the independent nature of that research, but what is interesting is that 42 per cent. of doctors got the answer about right. They thought that the proportion was about 10 per cent. Nineteen per cent. thought that it was about 20 per cent. and 25 per cent. thought that it was between 30 per cent. and 40 per cent. Thirteen per cent., who must be out of touch, thought that it was 50 per cent. or more. More worrying though was the public's attitude, and the survey covered about 400 members of the public as well. Three per cent. did not know and only 18 per cent. thought that it was around 10 per cent. Even more worrying is that 38 per cent. thought that it was 50 per cent. or more and on top of that 28 per cent. thought that it was between 30 per cent. and 40 per cent. Therefore, 66 per cent.—two-thirds—of the general public believed that drug prices form about 30 per cent. of NHS costs. The hon. Member for Fife, Central fuels that debate by adding to that misconception of the percentage costs of drugs in relation to the NHS.
I shall tread warily because, like the hon. Gentleman, I have received a fair amount of material in confidence. In fact, the hon. Gentleman mentioned in public session a figure that we were asked not to divulge. That will be on the record, and if he wants to check it he will find that he disclosed in the questioning yesterday a figure that we were asked not to disclose. I am not prepared to repeat it now. He will have to carry the can for that.
It is true that the PPRS is a scheme whereby the DHSS, with guidance from the Treasury—that is an important element; this is not a pioneering job done only by the DHSS, but one that is done in conjunction with and with the agreement of the Treasury—produced a basis whereby there should be an average return on the pharmaceutical industry's average historic capital employed. It is right and appropriate, and not just in the National Health Service—it applies equally in the Ministry of Defence and in other areas of major Government expenditure—that Governments should have a view on what the private sector's return should be. As a member of the Public Accounts Committee I would find it unacceptable if there were not a yardstick by which both the Treasury and the Department involved set a means of analysing the costs and profitability of companies servicing the public sector. I hope that Opposition Members agree that there must be some such basis.
The question then is whether the figure established is too generous in relation to the public interest—not the fact that it is there, because without it there would be enormously excessive profits. That basis was set, and it is interesting that it was set originally in July 1977. A figure was established, and it was enhanced by a percentage, because this industry is in the risk-taking business. The hon. Gentleman mentioned one company, but there are many. I suggest that all of the 60-odd companies that are involved must have failures in their development programmes. I suspect that in a screening process they screen hundreds of thousands of compounds before they come up with one successful product. So, by its nature, it is a risk business. It is not a business in which one can say to oneself "I shall look at this area and know for certain that if I screen 10,000 compounds in that area I am bound to come up wih a dozen winners". One could screen 10,000 compounds in one area and come up with no product successes at all. One could screen 10,000 compounds in another area and come up with one or two that are successful.
Above the target that is set, there is a grey area. Sometimes a company reaches that area if it increases its efficiency, or increases its exports, because it has generally improved its performance. We may disagree across the Floor of the House, but it is my view that if a company, by its own efforts, increases its efficiency and thereby its profits, it would be an disincentive to claw back the profit in the year in which it occurs. If it is a continual process, it is a different kettle of fish. If it is a one-off, or a near one-off, one must surely retain the incentive element, or there will be no investment in the future.
The target returns were originally constructed on a basis that was almost identical to the real rate of return looked for by the nationalised industries. That comparison was drawn, and that was the basis on which it was done. So if it is wrong for the drug companies, it was wrong for the nationalised industries. That is a valid point that hon. Members on both sides should bear in mind.
The hon. Member for Fife, Central was very flip about the role of the pharmaceutical companies in the private sector in this country. The tenor of his speech was that most of them are multinational, out to rip off everyone in sight and that they make little contribution. They employ directly about 70,000 people. It is not an insignificant number. In 1980 their exports were worth £523 million. I believe that they have increased since. They are profitable, but they pay tax. We obtain some clawback in corporation tax. The figure was not readily available within the DHSS. It will be interesting to see what has been paid in corporation tax when the figures are published.
This country survives by its exports. There is no hon. Member who does not believe that. We have a group of successful companies which do an important job for the nation. The hon. Gentleman says that they have done well out of the National Health Service and that the DHSS has been rather slothful in obtaining adequate rebates from those companies which have made excessive profits. It is a pity that the hon. Gentleman did not balance his remarks. Yesterday, in the public session of the Public Accounts Committee he was told specifically by the permanent secretary that the success of the negotiating ability of the DHSS should not be judged alone by the sum of rebates received. Its success should also be judged by the amount by which it had prevented price increases being imposed on the NHS by those companies that had wished to do so.
I do not have the exact figures, but the information given yesterday was that whereas the RPI, during the period that this scheme has been in existence, had increased by about 370 per cent., the index for drug prices had increased by only 230 per cent. The permanent secretary made great play of the fact that the Department worked extremely hard to ensure that any price increases were justified. The hon. Gentleman did a slight disservice to those who gave evidence yesterday by not explaining that dimension of what we were talking about yesterday.
The hon. Gentleman talked about the Greenfield report. I take no exception to him complaining about delays in the production of the report. I agree that if a report has been on the Minister's desk it should be published after a reasonable length of time. However, I take exception to the hon. Gentleman saying, sotto voce, that there are quotations in the press of savings of £175 million to £200 million if we went on to generic drugs. When that question

was raised yesterday, the permanent secretary and his officials made it clear in their evidence that they were in no position to verify any of those figures.

Mr. Andrew F. Bennett: Why not?

Mr. Morris: I do not know why not. It is not my responsibility to say why not. The hon. Gentleman should come to the Public Accounts Committee one day. He might learn a little. We expect officials to come briefed on the subject with which we are dealing. The report is not yet published, and it is wrong for the hon. Member for Fife, Central to go on about figures quoted in press reports because they have an unhappy history of sometimes being wide of the mark. Sometimes they are right. These reports may be right.

Mr. Bennett: The hon. Gentleman is complaining about press reports. Does he agree that the Government have a simple answer? They should ensure that the original report is published as soon as they get it. That discourages this sort of leak.

Mr. Morris: I could never agree that any Government should publish a report as soon as they receive it. Any Government, whether Labour or Conservative, must be given a reasonable time to assimilate a report and formulate their views on it.

Mr. Laurie Pavitt: How long?

Mr. Morris: I do not know how long the report has been on the Minister's desk.

Mr. Pavitt: A year.

Mr. Morris: The hon. Gentleman may be right, but I do not know whether the report has been on the Minister's desk for a year. I do not think that the hon. Gentleman's assertions, which are based on press speculation, are necessarily useful.
I understand that there may be people who want to use wholly generic drugs in future. I am sure that the Co-operative Society and others could produce a generic drug. Many people suffer from allergies and reactions to drugs. There must be dozens of antacids on the market. If the hon. Member for Fife, Central is saying that every antacid is an identical product, he is talking absolute bunkum. If he is not saying that, he is saying that there is a role for branded products and that there must be a variety of products to meet individual needs.
I declare an interest, as I am married to a busy general practitioner—

Mrs. Dunwoody: If I were married to the hon. Gentleman, I would be very busy also.

Mr. Morris: I only wish that the hon. Lady's surgery was as busy as my wife's surgery. The vast majority of doctors welcome a visit from a medical representative. The hon. Member for Fife, Central may laugh, but I have a survey supporting that view. Admittedly, it was carried out in 1975 and is seven years old, but I do not think that attitudes have changed. Provided a medical representative has made an appointment, he is welcome. Doctors find it a problem keeping up to date with developments, and there are a great many developments in drugs. It is vital that medical practitioners remain up to date and the medical representative plays a key role in that.
The hon. Member for Fife, Central may say that we should fire all the representatives. Presumably, with


generic drugs, we would not need them. We could fire the lot of them, which would save some money. In Committee yesterday, the hon. Gentleman referred to advertising costs. It was made clear in evidence that they are controlled so that they are no more than 10 per cent. of the cost price of the product. I suppose that one could suggest that all advertising and promotion was banned.
Comments were made yesterday in Committee about foil packaging, and it was suggested that all pills should be put in bottles. Thankfully, that suggestion was hit on the head by the chief medical representative of the DHSS. He said that pills were put in that sort of packaging for child safety and dosage reasons. The hon. Gentleman does not do service to Britain when he runs down a successful industry. I am all for catching the profiteer. I am sure that he will agree that I am prepared to put questions in the Public Accounts Committee as toughly and as strongly as he is.
The drug industry is successful, but there is much pioneering work to be done. There are many people still suffering, in this country and across the world, from diseases for which we have no known cure. It does no service if, for the sake of saving a couple of million, we stop further research work on some of these crucial studies. Neither the hon. Member for Fife, Central nor I know what those crucial studies will be, or which company will come up with the answer. It is in the nature of this type of research that one cannot tell. Therefore, he does not do a service to the country or to the NHS patients by pursuing the line of questioning that he has followed this evening.

Mr. Laurie Pavitt: I shall take up some of the points that the hon. Member for Northampton, South (Mr. Morris) has made. He knows that the Office of Health Economics has been a subsidiary part of the Association of British Pharmaceutical Industry ever since its inception. Therefore, although it does excellent work in some regards, all its reports for the past 20 years lean over backwards to explain and apologise for the drug industry.
With regard to the possibility of clawback, I remind the hon. Gentleman that the PPRS—which used to be the VPRS—has, under all Governments, run rings around the DHSS. As a consequence, my hon. Friend the Member for Fife, Central (Mr. Hamilton) is right in saying that we are paying far too much for our drug bill. Only two Ministers ever attempted a clawback, both of them Conservatives. One was the right hon. Member for Down, South (Mr. Powell), who got into considerable difficulty for doing so.
The second person who attempted this was the present Chancellor of the Exchequer. He had a battle with Roche, which took him through all of the courts to the House of Lords. Eventually, the right hon. and learned Gentleman clawed back £3 million of excess money that the Health Service had paid to Roche. Twelve months later I presented to him a list of the price increases that Roche had put on all of its products. That meant that it finished up with a profit on the deal. Part of the problem is that the efficient organisation of the drug companies is such that they run rings round us most of the time.
The World Health Organisation has published a list of 200 essential drugs. However, all the vaunted research has meant that under the NHS over 20,000 drugs have to be

kept by the pharmacists for the doctors to prescribe. All of that has been the result of the research that we call "me too"—one takes a drug and changes a compound of it, which results in another drug to be part of the armoury of the pharmacist. Unfortunately, it means a great deal of expense in terms of the stock that has to be held by the pharmacist.
My hon. Friend the Member for Fife, Central talked about the selling price and about the rip-off that takes place. At the moment, the Council of Europe is seriously discussing the problem of the rip-off by the drug companies whose market in the Western world has been diminished. Instead, they are selling drugs to the Third world, which it very often does not need and cannot use, but out of which the companies are making a profit.
For example, Ciba-Geigy Ltd produces a drug called Entero-Vioform which we had in this country for many years, but which has now been banned. However, it is still exported to the Third world. After a great deal of pressure from the World Health Organisation, the company has agreed to withdraw the drug, after three years. In other words, it will clear the stocks of a drug that we will not have in this country and which the United States has banned, by selling it to the Third world.
The evidence on research is that in the past two years research into diseases prevalent in tropical countries has now been reduced to a minimum. The London School of Hygiene and Tropical Medicine is one of the most important in the world for research into tropical diseases. However, because of cuts it is in danger of having to close the reseach department, because the emphasis is now on drugs for the civilised, Western industrial countries, and a place such as the school is being clobbered.
I wish to say how grateful the House should be to my hon. Friend the Member for Fife, Central. This is not the first time that he has forced a debate on a report that the Government have tried to sweep under the carpet. As long ago as July 1980, he raised the question of the Black report. It took nearly two years before hon. Members were able to obtain a full debate. Irrespective of whether we are talking of a limited number of drugs or the whole range, the Government say it is important to save. They make the erroneous claim, in my view, that charges to overseas visitors will produce £6 million. This has meant introducing an elaborate increase of administration. Yet when there is a possibility of saving between £29 million in respect of 11 drugs and £175 million for a larger number, the power of the industry is such that the Government are impotent.
I feel certain that when I introduce my Bill on generic prescribing my hon. Friend the Member for Fife, Central will be one of my sponsors. Ever since Nye Bevan introduced the Health Service, every Minister of Health, Labour and Conservative, including lain Macleod and Kenneth Robinson, has made a plea for use of the British pharmacopoeia and the British national formulary and advocated generic prescribing rather than brand names. After 30 years, 80 per cent. of prescribing still consists of brand names.
An obvious advantage is the chance to eliminate a large sum in commercial expenses. It is amazing that for every nine general practitioners in this country there is one commercial traveller calling upon them and getting them to prescribe drugs. I can think of no better selling job than calling upon a man to sell him something that he does not have to pay for. If the Minister consults general


practitioners in any area and goes to the pharmacist, he will discover which representative has been visiting the area. The drugs dispensed indicate the salesmen who are selling their drugs of a particular brand.
The saving that could be made is fantastic. At the risk of wearying the House, I should like to give a few figures. One of the drugs used most these days is Mogadon. The National Health Service is paying a price of 210p per 100. Under generic prescribing Nitrazepam costs 110p per 100. I can go down a list of drugs. Aldomet costs 495p per 100. Under generic prescribing, the cost is 235p. Inderal costs 420p per 100. Under generic prescribing the cost is 120p. Indocid costs 555p per 100 compared with 180p under generic prescribing. Lasix costs 540p. per 100. Under generic prescribing, the cost comes down to 80p. The difference is phenomenal.
When we talk of a saving of millions of pounds we are talking only of what is practicable. I have been pleased to hear about the discussions taking place in the Public Accounts Committee. A limited amount of generic prescribing could mean a saving of £29·7 million on only 11 drugs. There are 300 drugs in popular use. If generic prescribing were introduced, I consider that saving of £175 million to £200 million would be a conservative estimate. It is fantastic that we pay half as much again for our pharmaceutical services, our drugs bill, as for the whole of our general practitioner service. The balance is wrong.
I have a love-hate relationship with the drug industry. I know that the chairman of the ABPI does not look for Reds under his bed. I know that instead he looks for me. I accept that the use of drugs can avoid sending a patient to hospital but that is not a reason for having 10, 20 or 30 different drugs on the market that do the same sort of job. Generic prescribing would produce significant savings and still prevent some hospitalisation.
A problem that we would have to face with generic prescribing would be the preservation of the quality of generic drugs. There need be no great difficulty about that. The substitutes would of necessity have to be tested, and it would be possible, with the help of the Pharmaceutical Society of Great Britain and the Royal College of General Practitioners, to reach comparable ways of preserving quality.
Clinical freedom has always been a stumbling block. No Minister in successive Governments has ever been prepared to interfere with doctors' clinical freedom to prescribe what they want. If we had general substitution by qualified pharmacists, the doctor could still preserve his clinical freedom. He would have only to write across his prescription form, his FP10, "No substitutes". That would safeguard his clinical freedom and at the same time it would enable the pharmacist, who very often has far more knowledge of these matters than the doctor, who is concerned with wider responsibilities, to employ his skill and knowledge.
Many of the drugs that we use are unnecessary and this adds to the drugs bill. A recent study took place in the Federal Republic of Germany. There are 600 products sold in Germany that claim theraputic value in treating heart diseases. The study revealed that about 400 were of no value. It evaluated 567 drugs and judged that a full 70 per cent. were not to be recommended and that it was a waste of public money to make prescriptions for them.
My hon. Friend the Member for Fife, Central talked about the profits of the drug companies. We have always

heard the argument that is based on research. It is interesting to compare the profits of drug companies with other companies in every section of trade and commerce. The drug companies have been at the top of the league for the past 25 years. Over the past 10 years their research has been absorbed before their profits are stated.
The research in which the companies engage is not all to their own credit. The Under-Secretary of State knows that from 1970 onwards the Medical Research Council in its pharmacological units, has had contracts with the drug companies. A good deal of the research that eventually finds its way into the drug companies has been part of the research that has been funded through the Medical Research Council's individual pharmacological units.
I have details of most of the large national drug companies profits, including the profits of Lilly, the company that was discussed by my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). Last year it probably made another $12 million from Opren. It seems that commercial rewards are the first consideration. The care of the sick and the disabled and the restoration of good health are not issues that should go to the market place to be bandied about for profit. It is a civilised responsibility and it is time that the Government faced the fact that we cannot continue to bolster the huge profits of drug companies on the ground of research and on their export results, which are quite good. I have no quarrel with their export performance. Nevertheless, the pharmaceutical industry's profits are made at the expense of public expenditure and the NHS. The NHS is comprehensive. The total expenditure of £14 billion is limited and once one allocates to any one section of the service, it is inevitable that funds are not available for the rest of it. The excessive cost of drugs and pharmaceutical services means that other sections of the Health Service are deprived. One example is renal dialysis which is deprived because we are spending our money in the wrong direction. Savings on the drugs bill could rectify some of the present NHS financial shortages.

Mr. Frank Haynes: I too congratulate my hon. Friend the Member for Fife, Central (Mr. Hamilton) on raising this debate. It gives the House a valuable opportunity to discuss the pharmaceutical industry.
I was privileged to serve on several committees and bodies outside the House before I came here. We often examined the pharmaceutical industry, the massive profits that it made and the cost of drugs to the NHS, the Government and, in the final analysis, the public, who must foot the bill. Ever since I have been here, Secretaries of State for Health and Social Security have announced increases in prescription charges. The reason they give for the increase is the cost of drugs.
I was lucky enough to serve on the Committee on the Health Services Bill 1980. The previous Minister for Health said much in that Committee because hon. Members asked many questions about the pharmaceutical industry. He promised the Committee that he would act on the cost of prescription charges.
It is all very well for the hon. Member for Northampton, South (Mr. Morris) to talk as he did. He appeared to have his head in the clouds. He is a member of the Public Accounts Committee yet he does not know what is going on. I thought that members of the Public


Accounts Committee got all the information that they required to do their job. I have heard today that that is not quite true.
The Greenfield report has been on the Secretary of State's desk for a year. He is not yet prepared to let the Public Accounts Committee examine it. That is disgraceful. I believe that it is being withheld for a purpose. Many people and the media are talking of the possibility of a June election. Perhaps that is the reason. I do not know. The Public Accounts Committee certainly does not. Some hon. Members have asked why they cannot have a copy. My hon. Friend the Member for Fife, Central wrote to the Stationery Office and asked for a copy of the Greenfield report. He was told that it was not available but that it might be in the future. Things have come to a pretty pass when one cannot do one's job properly.
With regard to what the Minister for Consumer Affairs said about doing something about the costs of the drug industry being passed on to the consumer, I have the impression that there is a softly, softly approach. We are not prepared to take the issue by the scruff of the neck and do something about it in the interests of the people whom we are supposed to serve.
The Secretary of State for Employment, for example, has been talking for some time now about the trade union political levy to the Labour party. He can have his thoughts, he can make his speeches and he is entitled to his opinion, but there is a list of firms in the drug industry that contribute to the Conservative Party. Let us have a look at that. It cannot work one way; it must work both ways. This proves to me beyond doubt the unfairness of some of the things being said about trade unionists from the Government Front Bench. Trade unionists are involved in the pharmaceutical industry.
I am shocked at the figures presented by my hon. Friend the Member for Fife, Central of the profits that could be creamed off the industry if the Government went about it in the right way. Not long ago we were discussing the earnings of nurses and workers in the Health Service. This would be one way to solve the problem because the Government keep saying that they do not have the money. The money is there but it is being raked off, ripped off.
My hon. Friend did not use the term "rip-off" but I think it was what he meant. I am using it. The hon. Member for Northampton, South challenged my hon. Friend's remark and suggested that perhaps he meant a rip-off. This is not the one-off exercise that the hon. Member for Northampton, South, who sits on the Public Accounts Committee, thinks it is. It has been going on for a long time.
I may be open to criticism because we had a Labour Government who also did nothing about it. The Labour party is governed by its conference decisions in many ways. A Labour Government have never been given an instruction about the pharmaceutical industry. I believe that the industry should be part of the public service. I really believe that. What has been said about research is eyewash. The money will be found to do the research because that will help to find ways to create the massive profits to line the industry's pockets. That is what is going on at the expense, as my hon. Friend said, of the pensioner, and the lower-paid worker. They have to pay, unless of course they qualify for free prescriptions. But

many people are making their contributions simply to provide the massive profits enjoyed by the pharmaceutical industry.
I hope that in the not-so-distant future we will have an opportunity to see the Greenfield report. I have the impression that there are matters in the report that the Government, and in particular the Secretary of State for Social Services, do not like. That is why he is sitting on the report and why he does not want it to see the light of day.
There are ways and means by which the Inland Revenue could deal with this situation. The ordinary worker is dealt with every week—every Friday when he receives his pay packet, as I used to receive mine at the pit. Those on PAYE are dealt with, and there are ways and means of dealing with these massive profits which are made at the expense of the National Health Service.
We have recently seen reports in the media—I saw it for myself on the television news—of police moving in on social security frauds. When the Department of Health and Social Security informs the police of fraud it is not long before the police are active. It is a pity that we cannot have some police action on this type of thing. There is no doubt that it is crooked.
I hope, although I doubt it very much, that as a result of what is said tonight, the Government will grasp the issue by the scruff of the neck and give those profits where they belong—to the people of the nation.

Mr. Andrew F. Bennett: In the newspaper this morning two items about the Department of Health and Social Security struck me as being considerably significant. One was the report of the Public Accounts Committee and its questioning yesterday, and the other was the report on the publication of the book "Poor Law" concerning the raid by the police and the DHSS in Oxford on 2 September—"Operation Major". Those two cases illustrate nicely the attitude of the Department.
I do not approve of anyone who is ripping off the Department—in other words, ripping off the public. I would be the first to want to stop anyone taking money illegally from the Department. However, let us look at the way in which the Department behaved during the raid in Oxford. It appeared to act with a desire to maximise the impact on public opinion of the amount of money that was being ripped off. It issued false press statements about the amount of money that was missing. It broke almost every law and its rules and those of the police in hounding homeless people in Oxford. Those who have virtually nothing and no home get such treatment from the Department.
However, when more money is involved, the Department seems to treat the drug companies with great deference. The Department is not willing to chase after them to try to get back what appear to be considerable profits at the expense of the Department, the taxpayer and the people. It is high time that the Department got its priorities right. It should put a little more effort into pursuing those who are ripping off large sums of money from the Department first and then it should try to make sure that small sums are not ripped off.
I welcome the Public Accounts Committee's inquiry. I hope that it will spend a little time considering the extent of the profits of many drug companies. I get the impression


that the level of profits is what the drug companies decide to show. Most of them operate in more than one country. Many of them operate in a large number of countries. It is fairly easy to move one's research costs or profits from one country to another.
In their negotiations with the Health Service, I have a suspicion that too often those companies put down a high element of research costs and then they carefully put down low profits, while in another country they show a higher profit because the Government there will not tax them as highly or will not be concerned at the level of profit, and a lower amount is put into their accounts for research and so on. Therefore, it is easy for those companies' accounts to be massaged if they have an argument with the Department about their profits. I hope that the Public Accounts Committee will look carefully into that matter.
How do the drug companies justify high profits? They say that they need them to encourage risk taking and research. Everyone thinks that research into medicine is a good thing. However, we must ask ourselves where the research is being directed. Is it being directed towards medical needs or towards making more profits? I get the impression that much so-called medical research is directed not towards meeting medical needs but towards refining or altering a drug, not to meet a medical requirement, but often to improve its appearance or to do something that will help the sales of the drug—

Mr. Pavitt: Or to break patents.

Mr. Bennett: I agree that patents are broken to try to pinch some of the profit from another drug company. If the drug companies can justify high profits to encourage research, there must be more control over that research to ensure that it meets medical needs and is not a means of feeding back profits to the drug companies.
One of the nastiest sides to the behaviour of drug companies is that they appear to be ripping off the people of Bangladesh. The Government of Bangladesh reacted to the drug companies by deciding that the majority of drugs would be produced within that country and that they would not pay any royalties. That was a sensible reaction from probably the poorest country in the world to exploitation by the drug companies.
The drug companies complained to the Governments of Britain and the United States. The British Government, I am told, tried to put pressure on the Bangladesh Government not to treat the drug companies so harshly.
We ought to have a statement explaining why the Government took the side of the drug companies against one of the poorest countries in the world instead of protecting that country. We give aid to Bangladesh, yet in the basic area of the provision of cheap drugs we appear to be saying "You have got to pay extra". Surely the developed world could afford to give Bangladesh the drugs for nothing instead of saying "Not only do we want to cover costs but we want to cover profits and make more on the side to cover research". Our behaviour was appalling. It was also disgraceful that no Minister told the House what the Government were doing.
I have spoken to quite a few doctors in my constituency and other areas. As the hon. Member for Northampton, South (Mr. Morris) said, far from welcoming the rep coming round, most doctors find it slightly distasteful. They dislike the way in which the rep comes in with a new gimmick that may keep children amused for a day or two,

thereby encouraging the doctor to take one particular brand of drug and to encourage its prescribing. The doctors mildly resent that.
There is even greater resentment at the fact that if doctors go to one of the medical centres for postgraduate education they find that the vast majority of information is provided by courtesy of the drug companies. The drug companies provide refreshments, and so on. The doctors feel that much of the medical information that they require is biased and slanted as it comes by courtesy of a drug company.
It is distasteful that doctors should feel that they have been bought by the drug companies. When they want clear information, they must obtain it packaged by a drug company with a bias for selling a particular brand of drug or appliance. Most postgraduate centres must rely on that sort of thing or the in-service training of the family practitioner, but many conferences that doctors attend are sponsored by the drug companies.
If the drug companies were paying out of the kindness of their hearts, it would not be so bad, but the cost falls on the National Health Service as a result of the charges for the drugs it uses. If the Health Service pays, those events should be put on without the built-in bias of the promoting drug companies that have a vested interest in selling their brand rather than another brand, even though the two drugs may meet exactly the same need.
The Greenfield report should have been published as soon as the Government received it. There should be a proper public debate. It is perhaps true to say that the report is too harsh on the drug companies. If we had such a public debate, the drug companies and other people could put forward their views, and the Government thereby could arrive at a decision. Apparently, the Government want to decide first and allow people to react afterwards.
Many of our chemists would be more efficient if doctors were encouraged to stick to a basic list of drugs for the majority of patients. Only where there is a clear medical need should they not use the list. Many parts of the country have great difficulty in getting chemists to remain open in less profitable areas. Chemists complain about the amount of stock that they must now carry to meet the needs of patients, even though many brands do exactly the same thing. If they were able to carry a much smaller stock from the generic list, costs would be reduced and we might be able to retain chemists in some of our marginal areas for the benefit of the sick and the elderly.
I am concerned about the cost of drugs and about the fact that many people are not well-informed about it. There would be advantages in putting the cost of the drugs on the bottle or packet once the prescription was made up. Too many people do not have a realistic view of what the NHS costs. If they had more idea, more people would be convinced that they get good value for money from the NHS.
Doctors often prescribe tranquillisers and similar drugs that cost £15 or £20 per prescription. It might do more good if they were able to give the patient the cash, as that would relieve the patient of much of his anxiety and worry. I appreciate that a professional body looks into the over-prescription of drugs. Even so, it is ridiculous that doctors can prescribe drugs with no difficulty but cannot prescribe a home help. The doctor can make such a recommendation to the local authority, which then carefully weighs up the resources involved. Sometimes it spends more than the


cost of a home help for three or four weeks in deciding whether to allocate that home help. It is important to look at these facilities in the round, and not just at the drugs that can be prescribed. We should try to ensure that the doctor can prescribe all those things.
I congratulate my hon. Friend the Member for Fife, Central (Mr. Hamilton) on initiating the debate. I hope that he will pursue it. I also hope that the Public Accounts Committee will put pressure on the Government. I further hope that by then the Government will have published the Greenfield report and that they wil take some action to ensure that the NHS is not ripped off by the drug companies.

Mr. Allen McKay: These have been two useful Adjournment debates. As usual, when time is available, we discuss subjects that are both interesting and informative. Much useful information has been gained, and we should be grateful to my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and my hon. Friend the Member for Fife, Central (Mr. Hamilton) for initiating these debates.
The pharmaceutical firm of Sterling-Winthrop is located in my constituency, and there is no doubt that it reads our debates in Parliament. I have tried to build a relationship with Sterling-Winthrop, and have gradually succeeded, as it is one of the main manufacturers of paracetamol. That company therefore has an interest in what we are now debating.
Quite often, we pay through the nose for various drugs on prescription. A recent television programme presented the possibility of going abroad and buying the same branded drugs as are sold in Great Britain at half the cost. That irony is proof that the National Health Service drugs bill could be reduced to more reasonable proportions.
I receive letters from constituents who are not exempt from paying prescription charges, but who should be. The most recent letters that I have received on the subject were not from patients but from general practitioners who were disturbed at the high cost of the drugs that they must prescribe and the high cost of some surgical appliances.
Those practitioners believe that it is time that we examined exemption certificates and had a look at what is happening in the outside world. Many people can obtain exemption certificates, including women over 60, men over 65, children under 16 and pregnant women. Mothers who have had a baby in the past 12 months are also exempted. That means that if a woman has a baby every 12 months, she can obtain a free prescription each time.

Mrs. Dunwoody: She would need to.

Mr. McKay: A list of items and illnesses are also exempt. If one is not ill before one starts reading the list, one certainly is by the time one has finished. There is the old adage about the social services which we have discussed frequently, that, if one has more than £2,000 in the bank, one is debarred from receiving free prescriptions. That area should be examined.
The Government are examining the possibility of private hospitalisation. Doubtless those who can afford to pay for private hospital treatment will pay very high prices for the drugs they obtain. It will not be a two-tier medical service but a three-tier one comprising a high income

group who can afford private hospitals and high-priced drugs, a group who discover on paying for private hospitalisation that they cannot afford to pay for the drugs and who return to the National Health Service, and the remaining group in the National Health Service.
We should also consider the Government's recent Think Tank report that talked about private hospitalisation and also about patients having to pay more fully for the costs of the medicines and the drugs that they receive.
If such a system were to be introduced by the Government and succeeded in reducing the drugs bill, that would be more satisfactory until the time of a Labour Government when we can do away with private hospitalisation and bring in the free National Health Service that was originally envisaged.
Health services are under pressure and I shall be talking to an area health authority on that subject shortly. I have arranged to meet the Barnsley health authority at 10 am tomorrow and I shall have to travel through the night to ensure that I arrive on time. That authority is anxious about the cuts in the National Health Service. If we can bring overspending on drugs under control, as a result of this debate, other pressures and Government action, more money will be available for the National Health Service and for the people of whom I have been speaking.

Mrs. Gwyneth Dunwoody: With the permission of the House, I wish to say a few words.
I, too, congratulate my hon. Friend the Member for Fife, Central (Mr. Hamilton) on raising an important matter this evening. Why are we so worried about the pharmaceutical industry? It is because, since the Government came to power, Minister after Minister has come to the Dispatch Box and announced, rather like a magic jack-in-the-box, many figures. They always manage to say that they are giving much more money to the National Health Service overall, yet each regional health authority must announce cuts in services.
The Minister of Health has made almost a career out of visiting hospitals and children's units that are about to close, and explaining to the populace at large that the Government can provide a sum of money to save that unit, although not always for very long or in a useful way. One thing that the Minister has had to do for the Government is explain the inexplicable. Why are we so concerned—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Major.]

Mrs. Dunwoody: We have heard tonight that the pharmaceutical industry is a battered and poor industry, which understands its responsibilities to the community as a whole and is worthy of our support. Let us examine what happens in the industry. Between 1970 and 1980, this poor weakling of an industry had a growth rate of 5·8 per cent. During the same period, the chemical industry had a growth rate of 2·5 per cent., and manufacturing industry had a fall in growth so that the figure for manufacturing was minus 0·3 per cent. In 1980, the trade surplus for the pharmaceutical industry was 29 per cent. In Britain the majority of its sales are to the National Health Service.
Great play has been made of the fact that the pharmaceutical industry spends a great deal on research and development. It is said that the industry must have


profits larger than other industries because it reinvests those profits in much research. However, one matter that is certain about Britain is that the National Health Service provides a safe and constant market. There is no other market in the world where a pharmaceutical industry can be so sure of selling the amount of drugs that it does. The NHS is a constant customer and provides easy marketing conditions for the representatives of pharmaceutical firms. We have the right to say to the firms, "Are you sure that you are not ripping off your best customer? Prove to us that the prices you charge and the profits you make are justifiable."
The Government must have had some reservations, because they set up an inquiry on the best and most effective form of prescribing. The report, which has come to be called the Greenfield report, has been in the Government's hands for nearly 12 months. Although there has been constant pressure from the House, no Minister has been prepared either to say openly what is in the report or to make it public. My hon. Friend the Member for Fife, Central told us that HMSO has no plans to make it public and say that the only access that we shall have to the information is for hon. Members to search for copies in the Library. Less than a week ago, the Secretary of State said at the Dispatch Box that he intended to publish the report soon. When questioned by hon. Members, he said that that was because he wished us to have an opportunity to know what the report said.
If the Greenfield report makes it clear that by moving to limited list prescribing and to generic prescribing we could save many millions of pounds for the National Health Service, the Conservative Government are failing in their duty by not making that report public as soon as possible. If wards are being closed, beds left empty and regional health authorities told to cut expenditure, we should consider not only ways of making conditions more uncomfortable for the staff and more unacceptable for the patients, but all the costs right across the board.
Anyone who knows anything about the workings of the pharmaceutical industry in Britian knows that its marketing procedures are outrageous. The hon. Member for Northampton, South (Mr. Morris) said that general practitioners welcomed the call of the reps because they bring information. He must be extremely naive. The reps bring glossy and expensively produced forms of advertising that are geared entirely to the interests of the company and very little geared to handing on accurate information to the medical profession.

Mr. Michael Morris: Is the hon. Lady saying that the factual statements on dosage rates and performance of products given by medical representatives are untruthful?

Mrs. Dunwoody: I am saying that if all that was in the publicity was dosage rates there would be very little objection to it and the drug companies would not have to have cocktail parties on yachts, trips on the Orient express or dinners such as are held constantly to put over that information. Any general practitioner could show the hon. Gentleman a wad of invitations to every kind of beanfeast, all of them provided by drug companies. Why? Is it because they seriously think that by giving a long dinner and a lot of alcohol they will provide factual information about dosage rates to general practitioners? Of course not. They know that what they have to get over is the specific problem with the brand name. That is what concerns the pharmaceutical industry.

Mr. Morris: I do not know whether the hon. Lady has ever been to one of these evenings. I have been to one or two. I am not a medical practitioner; I went as a guest because sometimes the wives and husbands of the practitioners are invited. I see nothing wrong in going as a husband. On the few occasions that I have been to such evenings, there has been a glass of wine and usually a buffet, but there has also been much detailed talk about the product or range of products. It is time the hon. Lady knew a little more about what happens on the ground before making assertions.

Mrs. Dunwoody: The hon. Gentleman has obviously a very interesting view of what it takes to pass on accurate information to the medical profession. If the only way general practitioners can understand facts—

Mr. Morris: It is not the only way. The hon. Lady has twisted it.

Mrs. Dunwoody: —is to have them given over a glass of wine, then the profession is in considerable trouble. The hon. Gentleman has illustrated one of the difficulties. If it was an information seminar, why was he there in the first place?
If we really want to know what is happening we have only to looked at some of the statements of companies outside this country. An American drug company gave the game away beautifully in an article which was reported in the Financial Times. It said:
We look at the whole costs of research and development and we decided we were spending far too much money. We therefore decided to limit our efforts, particularly because of the development of biochemical compounds. We then found that we were not only able to produce products which gave us a great deal of profit but, in fact, we restricted the amount of money that was spent on research.
So we now know that many of the amounts written in by the drug companies are unacceptable.
If we had any doubts about that we have only to consider what is happening in parallel importing. There may be considerable doubts about some aspects of that, but recently a number of pharmacists have imported drugs, identical drugs made by the same pharmaceutical companies but marketed in different parts of the European Community. They have proved that we have got the reverse of dumping. Drugs can be made here, exported to the EC and brought back for use by pharmacists at a price half that at which they are sold to the NHS.
I have today tabled a number of questions to the Department on precisely this, quoting individual drugs made by major companies, where the prices charged to the NHS are at least double the rate at which the same drugs are being marketed elsewhere. If that is not a rip-off, I should like to know exactly what it is.
Tonight we are discussing a question of such importance that we need to look hard at the facts and figures. The DHSS has told not only the Public Accounts Committee but the world at large in some of the evidence that it is not able to monitor what is happening over pharmaceuticals. Indeed, it seems that in comparison with the multinationals it is trying to monitor the price of drugs with a few civil servants and some part-time staff. When a civil servant was asked whether he was satisfied that there was no creative accounting on the part of the drug companies—the transfer pricing between one subsidiary of a multinational and another—the answer was that he was not. It is clear that the Department has a special responsibility tonight.
It is not the Labour Government who have cut the NHS. My Government regarded the NHS as of paramount importance because of the service that was provided to all the patients. It is this Government, whose strong commitment to profit means that they put the interests of the pharmaceutical companies way ahead of the interests of any other part of the NHS, who have done that. Let them explain why they have tried to suppress the Greenfields report. Let them explain to the House what they intend to do to lower the price of drugs to the NHS. But above all let them say whether it is their intention to allow the system to continue when the only people making an unwarranted profit out of the NHS are those who should be grateful to it for the market that it provides.

The Under-Secretary of State for Health and Social Services (Mr. Geoffrey Finsberg): One day the House will understand that the hon. Member for Crewe (Mrs. Dunwoody) never takes anything in. Were she capable of taking the advice of my hon. Friend the Member for Northampton, South (Mr. Morris), wine and all, she could go to a seminar and learn that it was her Government who made cuts in the NHS provision. This Government have made a real increase. She goes on and on purveying a farrago of utter rubbish and the House really pays little or no attention to her. It is sad that her hon. Friend the Member for Birmingham, Stechford (Mr. Davis), who knows far more than she does and prepares his case far better, is never allowed to speak on these occasions.
Let me try to deal with some of the facts because we have heard few tonight. My hon. Friend the Member for Northampton pointed out clearly the ignorance that exists in general about drug prices. In a way wholly unintended by the hon. Member for Fife, Central (Mr. Hamilton) the debate will enable me to put some facts on the record instead of the half truths and distortions that we have heard from so many Labour Members this evening.
The hon. Member for Brent, South (Mr. Pavitt) commented on what he called the "me too" drugs. He is one of the few Labour Members who understands such things. He might recall that even a marginal variation in a drug can lead to better clinical results or, in some cases, an absence of adverse reactions. To reduce the frequency of taking a particular pill, may be worthwhile. "Me toos" often compete in price. The long development times for drugs may mean that several companies will often be working simultaneously on the same scheme.
The hon. Gentleman then spoke about Entero-Vioform. He said that it is no longer available and that it is being exported to other countries. He knows full well that the Government do not legislate for other Governments. We are trying to support the World Health Organisation and we do not legislate against such things. It is wholly untrue to say that pharmaceutical companies do not do any significant research into tropical diseases. For example, Wellcom is prominent in the research work that it undertakes.

Mr. Pavitt: rose—

Mr. Finsberg: The hon. Gentleman will forgive me for not giving way. I have answered his point and I want to try to answer many others.
We have been told by a variety of Labour Members that the NHS is being ripped off. Let me give some facts. In 1979 savings resulting from the difference between price increases asked for and those agreed amounted to £14 million; in 1980, £6 million; in 1981, £11 million. In addition, rebates were £1·3 million, £1·6 million, £0·4 million and £3·2 million—all under this Government. I suggest that if the hon. Gentleman and his hon. Friends were to concern themselves with the facts the House would be a better place.
I want to say a word about Greenfield. I want to quote from the British Medical Journal—not, I think, the organ of the pharmaceutical industry—of 27 March 1982:
As is so often the case nowadays, the working group's report has been leaked".
That is a practice that I deprecate. The standards in public life of people who leak reports are abysmal. I wish that they would learn that decency is much more important.
This leak suggests that the report includes a recommendation that when prescriptions by general practitioners name a branded product the pharmacist should be able to supply a cheaper generic alternative unless specifically instructed not to do so. … We believe, however, that generic substitution will be a clumsy and ineffective way of reducing NHS drug costs and one that might discourage foreign investment in the British pharmaceutical industry".
That is what the BMJ thought.

Mr. Andrew F. Bennett: What was the date?

Mr. Finsberg: I gave the date, if the hon. Gentleman had listened. It was 27 March 1982.
Let us take a look at the PPRS. First, it is not a contract. The Department does not negotiate the purchase of medicines on behalf of the NHS. That is done either by health authorities buying for hospitals, or by chemists buying medicines to be dispensed on prescription under the family practitioner services. So the PPRS does not guarantee sales of medicines to the NHS.
Second, the PPRS is concerned only with prescription medicines sold to the NHS, although it takes account of the export sales of such medicines. The scheme is not concerned with over-the-counter medicines, such as aspirin or cough medicines which do not require a prescription. Nor are we concerned with the 5 per cent. or so of medicines that are prescribed privately.
The scheme was introduced in 1978, and it succeeded similar arrangements for regulating the prices of prescription medicines that had run since 1969. Before that, health departments had attempted to control the prices of individual medicines, but that did not prove satisfactory.
The mechanism by which these objectives are attained is as follows. First, the Health departments, with the agreement of the Treasury, and taking into account the profitability of United Kingdom manufacturing industry as to whole, and the high-risk nature of the pharmaceutical industry, fixes a target return on the historic capital employed in producing NHS medicines. The figure thus set is, in effect, an average for the industry. The second stage is to allocate target returns on capital for each of the 65 or so major companies that are covered by the scheme within the industry figure. There are separate arrangements for very small companies. In allocatiing a target to the individual company the Department takes account of four factors: investment in the United Kingdom, the value added by the manufacture of medicines, the company's research and development programme, and export earnings. Particular weight is given to exports.
The PPRS was introduced with the agreement of the industry, and while individual companies, not surprisingly, may have reservations about it, it has so far worked reasonably well. We have an effective and profitable industry that serves the country well.
Taking the 10 years 1971–81, and taking 1971 as the base year at 100, the RPI showed an increase over the period to 370, while the equivalent increase in prices of HNS pharmaceuticals was to 226. In other words, general prices had increased much faster than the price of NHS pharmaceuticals. Those are reassuring figures, but because the scheme has been running for five years and there have been important developments, both within and outside the NHS during that period, we are looking again, and we are quite determined that as pharmaceuticals account for about 10 per cent. of NHS expenditure, they should not be exempted from the search for greater efficiency to which we are subjecting the NHS.
For those reasons, we are proposing that the scheme should be reviewed by the Health Departments, in consultation with other interested Departments and the industry, to make sure that the balance of interest of the patient, the taxpayer and the industry itself is being properly served, and to propose any changes that may be needed.
This review will start later in the year, and will need to cover such considerations as the return on capital allowed to the industry, the incentives to efficiency and profit it offers to individual companies, the costs allowed as chargeable expenses under it, and the relationships to the issues raised in the report of the informal working group on effective prescribing, which my right hon. Friend the Secretary of State announced was shortly to be published.

Mr. William Hamilton: When?

Mr. Finsberg: I said that it was to be published shortly. The hon. Gentleman should have quoted what he was told yesterday in the public session of the Public Accounts Committee. Although, he was told by my permanent secretary that there are no figures in the report, he has spent some of his time quoting a variety of figures.

Mr. Hamilton: That is unfair.

Mr. Finsberg: It was during the public session of the Public Accounts Committee.

Mr. Michael Morris: The hon. Gentleman was not listening.

Mr. Finsberg: If the hon. Member for Fife, Central had asked us about the publication of the report—

Mrs. Dunwoody: He did.

Mr. Finsberg: The hon. Lady should listen. She was told twice that he had asked the Stationery Office. The DHSS does not control the Stationery Office.

Mrs. Dunwoody: rose—

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The Minister is not giving way.

Mr. Finsberg: If the hon. Member for Fife, Central had asked us, we would have told him that the document will be placed in the Vote Office.

Mr. Hamilton: When?

Mr. Finsberg: When it is published.

Mr. Hamilton: On a point of order, Mr. Deputy Speaker. The letter from the Stationery Office states specifically that it asked the DHSS what was happening. The information it gave me was based on what it had been told by the DHSS.

Mr. Deputy Speaker: That is not a point of order.

Mr. Hamilton: It is a good point.

Mr. Finsberg: I have not been in the House as long as the hon. Gentleman, but I know that if I want an answer to a question I write to the Department concerned and not to another Department.

Mrs. Dunwoody: There is a difference between something being placed in the Vote Office and its being published. Which of the two are we to understand? At Question Time in the House last week when the Minister was sitting on the Front Bench the Secretary of State was asked whether he would publish the report. He said that he would. What is the answer?

Mr. Finsberg: The report is being published and placed in the Vote Office. When the hon. Lady has served in a Government she will know that that is not an uncommon practice.

Mr. Andrew F. Bennett: When?

Mr. Finsberg: The pharmaceutical industry attracts a great deal of criticism, much of it misdirected and some downright malicious. I want to give some of the real achievements of the industry. We are talking of a multinational industry. Only five other countries have major innovative pharmaceutical industries—the United States, Switzerland, West Germany, Japan and France. United Kingdom-owned companies supply approximately one-third of NHS medicines. The United Kingdom accounts for about 4 per cent. of world sales of prescription medicines. None the less, 10 of the 20 best selling medicines in this country were developed in the United Kingdom.
The net balance of exports over imports in 1981 amounted to about £570 million. Capital employed on the industry in the United Kingdom increased by 25 per cent. between 1979 and 1981. That is over 8 per cent. in real terms. About 70,000 people are employed in the industry. They feel much more comfortable being employed by private enterprise than if they were taken over by the Opposition, who have displayed such a brilliant knowledge of business tonight.
The Opposition do not understand how one can manage to make profits and at the same time offer increased employment. Those are important benefits to the country and the individuals. They shoulassd be set against some of the figures that the hon. Member for Fife, Central sought to read out in terms which made them seem excessive. Surely, it is time to stop wingeing about one of this country's most successful industries, both in exports and employment. It would be pleasant and, a complete change to hear a word of praise occasionally for successful British industry from the Opposition. We never do. They choose to ignore whatever facts are given to them.
It is unfortunate that over the years the Labour party has demonstrated that it does not understand how British industry works. It shows clearly that it is prepared to put the jobs of 70,000 people and £650 million worth of exports at risk. That is not the sign of a responsible Opposition. It then talks about merchandise that is being


imported—medicines that have been manufactured in Britain, exported and bought back. It fails to understand that a safety element is involved. It is one of the features about which the Department, under all Governments, is especially careful. Safety is one of the most important features. One must be wholly certain that if a drug is imported—whether for the first time or if it is being reimported—the trade is properly regulated. Otherwise, there is a risk in buying medicines that are not licensed, that do not provide proper information for patients or that cannot be traced should a batch have to be recalled.
Having seen some of the forged packaging, I am not prepared, without much more careful research and regulation, to say "Of course, everything may be freely imported". We are working on a scheme that will provide the necessary safeguards.
We are also concerned to ensure that any savings that might be available to the NHS from that trade, when properly regulated, are properly secured. We shall be checking the prices being paid by retail chemists for medicines from various sources.

Mrs. Dunwoody: Is it the practice of the Department to act as a watchdog for the pharmaceutical industry? Is there any other sponsoring ministry in Whitehall that also does that? It appears that, in many instances, pharmacists are visited by DHSS or MAFF inspectors on behalf of the pharmaceutical industry.

Mr. Finsberg: As the hon. Lady has said, there is a question of a possible saving to the NHS by importing or reimporting drugs that have been exported. The Department has as its major concern a determination to ensure that every drug available in Britain is safe. Until we are wholly satisfied that the public are safe and that if anything goes wrong we can trace it, we are not prepared to say that drugs may be freely imported.
The hon. Lady, at the end of the debate, suddenly asks whether MAFF officials, or officials from any Department she cares to pluck out of the air, are visiting pharmacists. I do not know. I shall gladly find out whether MAFF is doing so. The hon. Lady began with MAFF, she moved to the DHSS and then asked whether there were any other sponsoring Departments. I have told her that I am prepared to investigate the matter and write to her with the facts. I do not know the answer because, quite frankly, that issue has not been raised in the debate. I cannot do more than that.

Mrs. Dunwoody: rose—

Mr. Finsberg: Even if the hon. Lady were on her feet, I could do no more than offer to write to her with the information.
It has been a useful debate, despite some of the wholly untrue remarks and disparaging comments made about an industry of which Britain should be proud. Indeed, the majority of ordinary people are proud of it. The views expressed by Opposition Members tonight are not those held by the majority of their constituents, who know that the NHS is good and safe under this Government. As the hon. Lady knows full well, it was the Labour Government under whom she served, who cut the NHS. Much as she would love to see cuts by this Government, she knows that when she does her arithmetic—if she is able to do it—an increase in real terms of more than 5 per cent. in expenditure cannot, even in the language that she uses, be represented as a cut. When the hon. Lady begins to understand that, the House will be better served.
All I can do is place the facts on the record. Those facts are known by people who understand such matters. I am more than content that people should understand them and understand that the Government mean to maintain a superb NHS.

Question put and agreed to.

Adjourned accordingly at half past Ten o'clock.